Pre-market trading for CVS Health Corporation ( NYSE:CVS ) fell 1% on Tuesday after Evercore ISI cut its rating on the stock from “perform” to “in line,” citing a cloudy future for the pharmacy retailer that also operates a health insurance company and a pharmacy benefits manager.
The analysts, under the direction of Elizabeth Anderson, outline operational risks for CVS (CVS) in 2024, such as the loss of the PBM contract with the health insurance Centene (CNC), which last year chose the Express Scripts division of Cigna (CI) to handle approximately 20 million of its members .
Additionally, Evercore ISI highlights a “very competitive” annual enrollment period (AEP) and the most recent CMS star rating reduction for the business’ Aetna National Medicare Advantage plan.
The company thinks that COVID benefits will go down and that CVS (CVS), which will do more than 32 million COVID-19 tests and give out more than 59 million COVID-19 vaccines in 2021, will have trouble getting paid.
CVS Stock Forecast
Evercore ISI has set a target price of $100 per share for CVS (CVS), which is equivalent to an 8x target for the 2023 EBITDA projection and an 11x target for earnings. The company is trading at a reasonable premium to its competitors, so this is a fair target.
Many investors are looking for dependable companies with consistent dividends because the market predictions for 2023 are all over the place. This is especially true given that the S&P 500 index has dropped more than 19% so far this year.
The shares of CVS Health stock (CVS -0.91%), a diversified healthcare business that checks all th...
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