Incannex Healthcare stock tumbles after filing $100M offering
Investing.com - UBS has lowered its price target on CVS Health (NYSE:CVS) to $67.00 from $71.00 while maintaining a Neutral rating on the stock. According to InvestingPro data, CVS currently trades at a P/E ratio of 14.7x and maintains a "GOOD" overall financial health score, suggesting resilient fundamentals despite recent price pressure.
The price target reduction comes as UBS analyst Kevin Caliendo revised the company’s Medical (TASE:BLWV) Loss Ratio (MLR) forecast higher for fiscal year 2025 to 91.5% from 91.3%, accounting for an additional $100 million in variable losses in Health Insurance Exchange (HIX) business during the second half of the year. InvestingPro analysis indicates the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report covering this prominent healthcare provider.
UBS also forecasts $130 million of incremental cost pressure in Medicaid in the second half, representing approximately 200 basis points in MLR for that segment, though these headwinds could potentially be offset by other enterprise initiatives such as Rite Aid (NYSE:US90274J5618=UBSS) location acquisitions or cost measures.
The firm notes that CVS shares have declined in 16 of the last 20 trading days, with the stock experiencing pressure despite relatively isolated exposure to the earnings volatility affecting managed care organizations in the HIX and Medicaid segments. Despite recent volatility, CVS has demonstrated stability through its 55-year track record of maintaining dividend payments, currently yielding 4.36%.
UBS believes an in-line quarterly performance and reiteration of full-year guidance should stabilize the stock, but visibility on Medicare Advantage bidding dynamics and Stars ratings in the fall, along with peer commentary on 2026 outlook, will likely be needed before CVS can break out of its recent trading range of $63-$69. The stock generally trades with low price volatility, as highlighted by InvestingPro’s analysis, which offers 6 additional key insights about CVS’s market position and future potential.
In other recent news, CVS Health’s pharmacy benefit manager unit has been ordered to pay $95 million to the U.S. government for overcharging Medicare for prescription drugs. This ruling was issued by Chief Judge Mitchell Goldberg in Philadelphia, with a decision pending on whether to triple the award under the federal False Claims Act. Additionally, CVS Health has opened a new Workforce Innovation and Talent Center in Chicago, which will provide job training for various positions within the company. In another development, CVS Health’s Aetna division participated in a meeting with U.S. health officials to discuss simplifying prior authorization processes for medications and medical services. This meeting included other major health insurers and aimed at streamlining procedures to benefit consumers. CVS Health also announced a quarterly dividend of $0.665 per share, payable in August 2025 to shareholders of record in July 2025. Furthermore, CVS Health experienced a positive development as Medicare Pharmacy Benefit Manager limits were removed from a tax bill, benefiting its Caremark division. These recent developments highlight ongoing changes and initiatives within CVS Health.
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