Wells Fargo has increased its price target for CVS Health (CVS, Financial) from $76 to $84 while maintaining an Overweight rating on the stock. Despite CVS surpassing expectations in the first quarter and raising its guidance, the company hasn’t performed as strongly as anticipated. According to Wells Fargo, the market seems cautious, likely due to uncertainties surrounding the quality of earnings.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 24 analysts, the average target price for CVS Health Corp (CVS, Financial) is $77.67 with a high estimate of $95.00 and a low estimate of $70.00. The average target implies an
upside of 15.76%
from the current price of $67.10. More detailed estimate data can be found on the CVS Health Corp (CVS) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, CVS Health Corp’s (CVS, Financial) average brokerage recommendation is currently 2.2, indicating “Outperform” status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CVS Health Corp (CVS, Financial) in one year is $85.65, suggesting a
upside
of 27.65% from the current price of $67.1. GF Value is GuruFocus’ estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business’ performance. More detailed data can be found on the CVS Health Corp (CVS) Summary page.
CVS Key Business Developments
Release Date: May 01, 2025
- Revenue: Nearly $95 billion, a 7% increase over the prior year quarter.
- Adjusted Operating Income: Approximately $4.6 billion.
- Adjusted EPS: $2.25.
- Cash Flow from Operations: Approximately $4.6 billion.
- Health Care Benefits Revenue: Nearly $35 billion, an 8% increase over the prior year.
- Medical Membership: Approximately 27.1 million, flat sequentially.
- Medical Benefit Ratio: 87.3%, a decrease of 310 basis points from the prior year.
- Health Services Revenue: Over $43 billion, an increase of nearly 8% year over year.
- Pharmacy Claims Processed: Over 464 million.
- Pharmacy and Consumer Wellness Revenue: Nearly $32 billion, an increase of over 11% versus the prior year quarter.
- Same-Store Pharmacy Sales Growth: Nearly 18% versus the prior year.
- Same-Store Prescription Volumes Increase: Nearly 7%.
- Retail Pharmacy Script Share: Approximately 27.6%, an increase of approximately 70 basis points from the same period last year.
- Full Year 2025 Adjusted EPS Guidance: Increased to a range of $6 to $6.20.
- Full Year Cash Flow Guidance: Updated to approximately $7 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CVS Health Corp (CVS, Financial) reported strong financial results for Q1 2025, with adjusted earnings per share of $2.25 and adjusted operating income of $4.6 billion.
- The company increased its full-year 2025 adjusted EPS guidance to a range of $6 to $6.20, reflecting confidence in its business performance.
- CVS Health Corp (CVS) announced a partnership with Novo Nordisk to increase access to Wegovy at a more affordable price, demonstrating its commitment to addressing cost pressures in healthcare.
- The company is making significant strides in digital health, using AI-powered recommendations to improve customer health outcomes and experiences.
- CVS Health Corp (CVS) continues to innovate in pharmacy services, with a focus on improving medication adherence and streamlining the prior authorization process to enhance customer satisfaction.
Negative Points
- CVS Health Corp (CVS) is facing challenges in its individual exchange business, leading to a decision to exit this market by 2026 due to continued underperformance.
- The company is experiencing elevated medical cost trends, particularly in its Medicare Advantage group business, which remains a concern.
- CVS Health Corp (CVS) is dealing with legislative challenges, such as the Arkansas bill that could limit access to its pharmacies, potentially impacting patient care and increasing costs.
- There are pressures in the Oak Street Health segment related to medical cost trends, which the company is monitoring closely.
- The potential impact of tariffs on the pharmaceutical supply chain and consumer sentiment towards vaccines could affect CVS Health Corp (CVS)’s operations and financial performance.
Source: gurufocus.com
