CVS Health (CVS) Model Not Broken, Buy on Weakness - Guggenheim
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Guggenheim analyst John Heinbockel said at flat 2017 at CVS Health (NYSE: CVS) doesn't mean the model is broken. He said patient, value investors should find the shares compelling..
Heinbocke commented, "With the shares off 15% pre-market (vs. 2% decline in the S&P), a significant move for a $90B market cap company, after already declining 15% YTD (vs. 4% rise in the S&P), the market is acting as if the operating model is broken. It is a bit reminiscent of late 2009, when the shares took a substantial hit on ongoing choppy results at Caremark. We do not believe that the model—operating multiple Rx assets and touch points under one roof to drive better health outcomes and market share—is broken. At a 12x P/E on 2017 guidance, it is now cheaper than many slower-growing, less well-positioned businesses. We would be Buyers on this weakness."
The firm had a Buy rating and price target of $115 on CVS into the results.
Shares of CVS Health closed at $83.39 yesterday.
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