Barclays Reiterates a Buy Rating on CVS Health

By Carrie Williams

In a report released yesterday, Eric Percher from Barclays reiterated a Buy rating on CVS Health (NYSE: CVS), with a price target of $85. The company’s shares opened today at $74.23, close to its 52-week low of $69.30.

Percher wrote:

“We were wrong. For both, the decision was not CVS’ and the loss of leverage associated with the volume was well more than we had expected. Given consistent reimbursement pressures, the negative impact of deleverage (loss of volume) is greater than the positive impact of leverage. On the way up, leverage from share gains offset reimbursement pressures and so it appeared that the marginal profit associated with new volumes was limited, particularly when this new volume was associated with managed care wins.”

According to TipRanks.com, Percher is a 1-star analyst with an average return of -7.2% and a 30.3% success rate. Percher covers the Services sector, focusing on stocks such as Walgreens Boots Alliance, The Advisory Board, and AmerisourceBergen.

Currently, the analyst consensus on CVS Health is Strong Buy and the average price target is $103.60, representing a 39.6% upside.

In a report released yesterday, Leerink Swann also reiterated a Buy rating on the stock.

CVS Health’s market cap is currently $78.31B and has a P/E ratio of 16.94. The company has a book value ratio of 2.2529.

Based on the recent corporate insider activity of 65 insiders, corporate insider sentiment is negative on the stock.

CVS Health Corp. engages in the provision of pharmacy health care provider in the U.S. It operates its business through three business segments: Pharmacy Services, Retail/LTC and Corporate. The Pharmacy Services segment provides a full range of pharmacy benefit management services to its clients consisting primarily of employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans and individuals throughout the U.S. This segment operates under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica and Accordant names. The Retail/LTC segment includes retail drugstores, its online retail pharmacy website, CVS.com, onsite pharmacy stores and its retail health care clinics. The Corporate segment provides management and administrative services to support the overall operations of the company. The company was founded by Stanley P. Goldstein in 1963 and is headquartered in Woonsocket, RI.