BofA maintains Buy rating and $80 target on CVS Health shares

On Tuesday, BofA Securities maintained a Buy rating on CVS Health (NYSE:CVS) with a steady price target of $80.00. The firm's analysts highlighted CVS Health's expectation to meet or exceed its full-year 2025 guidance as a positive indicator ahead of the company's first-quarter earnings report set for May 1, 2025. With a market capitalization of $80.5 billion and annual revenue of $370.7 billion, CVS appears undervalued according to InvestingPro analysis. The analysts emphasized the significance of CVS setting and surpassing financial guidance, especially considering the challenges the company has faced in recent years.Want deeper insights? InvestingPro subscribers have access to 10+ additional exclusive tips and comprehensive financial analysis for CVS Health.

The unexpected timing of new leadership at CVS, following the appointment of Tom Cowhey as CFO in January 2024, was noted by the analysts. They stressed the importance for investors to understand how the new leader, Mr. Newman, plans to steer the company and improve earnings in the coming year. The company maintains a healthy 4.17% dividend yield and has attracted positive attention from analysts, with five recently revising their earnings estimates upward.

BofA's optimism towards CVS Health is rooted in the company's unique business model, which they believe will drive enterprise growth over time. This confidence was further bolstered by the positive final Medicare Advantage rate decision announced on Monday, which BofA had previously assessed favorably. The company's strong financial health score and consistent revenue growth of 3.93% support this outlook. The firm anticipates a continued path for margin expansion at CVS's Aetna, reinforcing their Buy rating and $80 price target for CVS Health stock.

In other recent news, CVS Health has announced significant changes to its executive team, appointing Brian Newman as the new Chief Financial Officer and Amy Compton-Phillips as the Chief Medical (TASE:BLWV) Officer. The company also expressed confidence in achieving or surpassing its financial guidance for 2025, although the first quarter's financials are still being finalized. Additionally, CVS Health, along with other major healthcare insurers, is set to benefit from a 5.06% increase in Medicare insurer payment rates for 2026, a decision made by the Trump administration, which is expected to generate over $25 billion in additional revenue for the industry.

In legal developments, the Federal Trade Commission's lawsuit against CVS Health's Caremark unit and other pharmacy benefit managers over insulin pricing practices is set to resume. The FTC accuses these companies of limiting access to lower-priced insulin drugs. In another update, CVS Health has declared a quarterly dividend of $0.665 per share, payable on May 1, 2025, to shareholders of record on April 22, 2025. This decision reflects the company's commitment to providing shareholder value while enhancing healthcare services.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.