CVS Health Receives Price Target Cut and Hold Rating from Wells Fargo Analyst

Wells Fargo's Stephen Baxter lowered their price target on Cvs Health (NYSE: CVS) by 21.1% from $76 to $60 on 2024/05/07. The analyst maintained their Hold rating on the stock.

Baxter attributed the price target cut to the "MA-driven guidance cut," expressing uncertainty about management's revised guidance and earnings baseline due to its reliance on the non-recurrence of a significant cost issue in the first quarter. The analyst noted that low visibility made it challenging to have a more constructive outlook on the company's prospects.

Cvs Health recently reported its first-quarter 2024 earnings, which fell short of expectations. The company posted earnings per share (EPS) of $1.31, missing the Zacks Consensus Estimate by 22.5% and representing a decline of 40.5% compared to the first quarter of 2023. Revenue for the quarter came in at $88.44 billion, missing the Zacks Consensus Estimate by 0.9% and marking a 3.7% increase from the same period the previous year.

Looking ahead, Cvs Health's management has provided guidance for full-year 2024, with EPS projected at $7.00. This represents a downward revision from the previous guidance of $8.30 and is attributed to rising medical cost trends expected to persist throughout the year. Despite the challenges, President & CEO Karen Lynch expressed confidence in the company's long-term earnings power and outlined their commitment to addressing Medicare Advantage challenges.

In light of these developments, TD Cowen's Charles Ryhee also weighed in on Cvs Health on 2024/05/07. Ryhee lowered their price target by 40.4%, from $99 to $59, and downgraded their rating on the stock from Strong Buy to Hold. This decision adds to the mixed sentiment among analysts covering the company. According to data from WallStreetZen, 66.7% of top-rated analysts currently rate CVS as a Strong Buy or Buy, while 33.3% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus among analysts is that CVS's upcoming year will deliver earnings per share (EPS) of $8.42. If this forecast holds true, it would represent a 47.5% increase in EPS on a year-over-year basis.

Since the release of CVS's latest quarterly report on 2024/05/01, the stock price has declined by 1%. Furthermore, on a year-over-year basis, the stock is down 20%. This performance has lagged behind the broader market, with CVS trailing the S&P 500, which has experienced a decline of 25.4% during the same period.

Wells Fargo analyst Stephen Baxter, who issued the recent update on CVS, is ranked in the top 22% of Wall Street analysts by WallStreetZen. Baxter specializes in the Healthcare sector and has an average return of 4% and a win rate of 57.1%.

CVS Health Corporation is a diversified healthcare company that owns various brands, including CVS Pharmacy, a retail pharmacy chain, CVS Caremark, a pharmacy benefits manager, and Aetna, a health insurance provider, among others. The company, founded in 1963, is headquartered in Woonsocket, RI.

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