Cigna earnings beat by $0.04, revenue topped estimates
On Monday, UBS analyst Kevin Caliendo adjusted the price target for CVS Health (NYSE:CVS) shares, bringing it down to $59.00 from the previous $62.00. Despite the reduction, Caliendo has kept a Neutral rating on the company’s stock. According to InvestingPro data, analyst targets for CVS range from $48.01 to $93.00, with the stock currently trading at a modest P/E ratio of 13.6x. In his assessment, Caliendo expressed concerns about the company’s fourth-quarter earnings per share (EPS) and the outlook for 2025, citing a lack of high conviction. While the stock has shown strong momentum with a 21.85% YTD return according to InvestingPro, he noted that the near-term risk/reward balance for the stock, currently trading around $54, is slightly positive, with long-term prospects appearing more favorable.
Caliendo elaborated on potential positive catalysts that could emerge following the company’s earnings report, including final Medicare Advantage rates and leap-year utilization trends. However, he also pointed out risks that could affect the stock’s performance, such as headlines regarding the cryptocurrency Dogecoin (DOGE) and possible legislation impacting Pharmacy Benefit Managers (PBMs).
The UBS analyst underscored the importance of new management’s ability to effectively communicate their long-term strategy and rebuild trust with long-only investors who have recently left the Managed Care Organization (MCO) space. According to Caliendo, the reconnection with these investors is crucial for the stock to experience a further re-rating. However, he anticipates that this process may require time, leading to the reiterated Neutral stance on CVS Health shares. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides detailed analysis of CVS Health’s financial health and growth prospects.
In other recent news, CVS Health has been the focus of several financial firms’ analysis. Edward Jones upgraded CVS stock from Hold to Buy, citing potential for a successful turnaround driven by new management initiatives, particularly within its health insurance division, Aetna. Leerink Partners maintained a Market Perform rating on CVS Health shares while increasing the price target from $51.00 to $55.00, reflecting the firm’s expectation of an earnings recovery despite ongoing challenges within the Health Care Benefits sector.
Evercore ISI also raised its price target on CVS Health from $60.00 to $65.00 while maintaining an Outperform rating, anticipating future performance dynamics, particularly relating to the 2026 Medicare Advantage Rate Notice. Piper Sandler reaffirmed an Overweight rating and a price target of $64.00 for CVS Health, considering ongoing activities and expected developments involving the Centers for Medicare & Medicaid Services, the Federal Trade Commission, the Department of Justice, Congress, and several Texas District Courts.
In addition, major health insurers, including CVS Health, experienced an upswing following Elevance Health’s latest quarterly results, which reported a lower-than-expected medical-loss ratio, indicating better profitability for insurers. These recent developments underscore the dynamic nature of the healthcare sector and the potential for CVS Health’s strategic initiatives to drive future earnings growth.
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