Jefferies Raises Price Target on CVS Caremark (CVS), Sees Upside Potential
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Price: $104.15 +1.30%
Rating Summary:
34 Buy, 5 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
Rating Summary:
34 Buy, 5 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
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Jefferies is reiterating its Buy rating on shares of CVS Caremark (NYSE: CVS) and is raising its price target from $43 to $47.
The firm notes that CVS may end up being the big winner of the Walgreens (NYSE: WAG) and Express Scripts (Nasdaq: ESRX) split as the company could see an additional $0.05 per share in earnings in 2012 as a result of increased market share.
Jefferies forecasts 2012 profitability wont be seen until the second half of the year, but highlights the potential upside during that time is quite compelling. Three things driving the upside potential include the sizable buy-back activity, increased PBM revenues, and the dispute between ESRX and WAG.
An analyst at Jefferies comments, "It is becoming clear, in our opinion, that CEO Larry Merlo and his team are improving the operational excellence at CVS Caremark. The longer Mr. Merlo is at the helm, the more it appears he is the right man for the job, confirming his reputation as an excellent operator. The PBM is gaining share, retail execution is showing improvement and with the uncertainty of the WAG/ESRX/MHS drama, we believe the equity should be a core holding."
The firm is raising its FY11 and FY12 EPS estimates from $2.77 and $3.17 to $2.80 and $3.21. Revenue for the two years is projected to be $107.61 billion and $115.98 billion.
For more ratings news on CVS Caremark click here and for the rating history of CVS Caremark click here.
Shares of CVS Caremark closed at $37.15 yesterday.
The firm notes that CVS may end up being the big winner of the Walgreens (NYSE: WAG) and Express Scripts (Nasdaq: ESRX) split as the company could see an additional $0.05 per share in earnings in 2012 as a result of increased market share.
Jefferies forecasts 2012 profitability wont be seen until the second half of the year, but highlights the potential upside during that time is quite compelling. Three things driving the upside potential include the sizable buy-back activity, increased PBM revenues, and the dispute between ESRX and WAG.
An analyst at Jefferies comments, "It is becoming clear, in our opinion, that CEO Larry Merlo and his team are improving the operational excellence at CVS Caremark. The longer Mr. Merlo is at the helm, the more it appears he is the right man for the job, confirming his reputation as an excellent operator. The PBM is gaining share, retail execution is showing improvement and with the uncertainty of the WAG/ESRX/MHS drama, we believe the equity should be a core holding."
The firm is raising its FY11 and FY12 EPS estimates from $2.77 and $3.17 to $2.80 and $3.21. Revenue for the two years is projected to be $107.61 billion and $115.98 billion.
For more ratings news on CVS Caremark click here and for the rating history of CVS Caremark click here.
Shares of CVS Caremark closed at $37.15 yesterday.
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