Target (TGT) Enters Purchase Agreement with CVS Health; Piper Jaffray Reiterates Overweight
Piper Jaffray reiterates an Overweight rating and $91.00 price target on Target (NYSE: TGT) as TGT enters deal with CVS. CVS is to purchase, rebrand, and operate TGT's Pharmacy and clinic business for $1.9B. Analyst Sean Naughton sees this deal as an opportunity for TGT to get out of an unprofitable business, and increase traffic.
Naughton commented, "This morning, CVS Health and Target entered an agreement for CVS to purchase, rebrand, and operate Target's pharmacy and clinic businesses for $1.9B. We view this as an excellent partnership for Target as it allows for an exit from an unprofitable business, refocuses efforts on Target's core growth strategies, and provides an opportunity for increased traffic. Target continues to be a compelling retail story with improving comps and ROIC trends with an attractive dividend yield and reasonable valuation."
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Shares of Target closed at $80.45 yesterday.