CVS Health (CVS) Model Not Broken, Buy on Weakness - Guggenheim

November 8, 2016 8:50 AM EST
Get Alerts CVS Hot Sheet
Price: $81.56 -1.97%

Rating Summary:
    21 Buy, 8 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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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.

For an analyst ratings summary and ratings history on CVS Health click here. For more ratings news on CVS Health click here.

Shares of CVS Health closed at $83.39 yesterday.

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