For the second day in a row, CVS Health’s (CVS 4.98%) stock price saw a satisfying jump on Thursday. It closed the day almost 5% higher, on the back of both lingering optimism and news of another in a series of analyst price target raises. That improvement was markedly better than the performance of the S&P 500 (^GSPC 1.04%) on the day; it gained slightly over 1%.
One upgrade and a wave of price target increases
The positive investor sentiment on CVS is due to the pharmacy chain operator’s fourth-quarter earnings report, which were published early Wednesday morning. The company squeaked past the consensus analyst estimate for revenue, and crushed that for non-GAAP (generally accepted accounting principles) adjusted net income.
Following that, a clutch of analysts wasted little time in raising their price targets on CVS stock — in one case, even upgrading their recommendation.
This was Leerink Partners’ Michael Cherny, who now feels the shares are worthy of an outperform (read: buy) rating; previously he had recommended the company only as market perform (hold). According to reports, he felt that the company’s important units — particularly its Aetna insurance business — are improving notably, and the stock is now undervalued.
It’s buy time, according to some pundits
Cherny’s peers weren’t as willing to modify their recommendations, yet a handful of them raised their price targets. One of the more aggressive bumps was made by David MacDonald of Truist Securities, who now believes CVS is worth $76 per share, well up from his preceding level of $60. MacDonald reiterated his buy recommendation.
