Piper Sandler Starts CVS Health (CVS) at Overweight

Piper Sandler analyst Jessica Tassan initiates coverage on CVS Health (NYSE: CVS) with a Overweight rating and a price target of $85.00.

The analyst comments "We initiate coverage on CVS Health Corp (CVS) with an Overweight rating and $85 PT. CVS is a market leader across its healthcare financing, PBM, and retail drug store businesses. The $18B of strategic M&A earlier this year adds value-based care delivery to the mix. We feel confident in the subsequent integration efforts given our knowledge of the SGFY and OSH businesses and management teams. The Aetna acquisition in 2018 was a success; and we expect the SGFY and OSH acquisitions to work too. Key leadership has been retained; and will continue to command the acquired businesses under the CVS umbrella. Further, CVS is trading at an impaired ~7x FY24E EPS, likely with investors pricing-in M&A integration dilution, potential PBM regulation, and 340B headwinds. Ultimately, over the longer-term, we expect CVS to return to its 5-year historical P/E—FY2 average at 9.5x. Initiate at OW; $85 PT."

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 $68.82 yesterday.

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