CVS Health (CVS) KOL Call Validates Dialysis Plan - Jefferies
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Jefferies analyst Brian Tanquilut reiterated a Buy rating and $90.00 price target on CVS Health (NYSE: CVS) after hosting a KOL call with a Dialysis industry executive and walking away with a positive view on CVS's plan to enter the market. Management had outlined goals to offer a kidney program to >7.5MM Aetna members, and the expert noted that he sees momentum in the company's efforts to address end-stage renal disease. Once rolled out, the analyst sees this initiative driving MLRs down for Aetna, while highlighting the benefits of a differentiated, integrated strategy centered around HealthHUBs.
The analyst stated "Summing up his view, our KOL sees CVS as being ready "to do something big" in the space and noted that it has the potential to grow into the "Amazon of dialysis", though the actual timing of a scaled rollout remains unknown. With 80% of kidney failure patients finding out about their disease only through an ER visit -- at which time, they have no other option other than dialysis -- our expert believes CVS can actually prevent ESRD because of its ability to early-diagnose and prevent CKD from progressing given the unique combination and integration of Aetna and store-based healthcare. CVS also has the ability to push patients to in-home dialysis instead of center-based treatments."
Shares of CVS Health closed at $73.27 yesterday.
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