Investing.com — Shares in CVS Health (NYSE:) edged higher in early U.S. trading on Tuesday after analysts at Evercore ISI upgraded their rating of the healthcare group to outperform from in line.
In a note to clients, the analysts also raised their price target for the stock to $83 from $81, citing an “improving outlook and attractive valuation.”
“CVS […] is a complex organization, and we see a number of factors swinging in a positive direction,” the analysts said.
Last month, Rhode Island-based CVS left its current-year adjusted profit outlook unchanged, although the firm flagged that its medical benefit ratio — a measure of claims compared to premiums collected — will be at the higher end of its 2023 outlook due to “elevated” medical costs.
CVS also announced that it had slashed about 5,000 non-customer-facing positions in a bid to corral costs following a raft of spending on recent deals. Returns at the company, which runs one of the biggest U.S. pharmacy benefit managers as well as health insurer Aetna and a chain of pharmacies, are expected to be under pressure due in part to high expenses linked to the integration of recently-acquired primary care provider Oak Street Health and home healthcare services firm Signify Health.
Meanwhile, CVS has cut its 2024 profit forecast to a range of $8.50 to $8.70 a share from its previous outlook of around $9, and withdrew its 2025 guidance for adjusted profit of $10 per share.