Analyst Stephen Baxter of Wells Fargo maintained a Buy rating on CVS Health (CVS – Research Report), retaining the price target of $68.00.
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Stephen Baxter’s rating is based on the positive performance of CVS Health in the fourth quarter, where the company’s earnings per share exceeded expectations. The favorable medical loss ratio (MLR) in the Health Care Benefits segment was a significant factor, as it provided a welcome contrast to the uneven results seen across the Managed Care Organizations (MCO) group in the same quarter. Additionally, the guidance for 2025 suggests an achievable baseline with opportunities for outperforming, further supporting the Buy rating.
Despite some areas falling slightly below estimates, such as the Health Services EBIT, other aspects like the Pharmacy and Consumer Wellness segment showed robust growth with a notable increase in revenue. The increase in total medical membership, including a significant rise in Medicare Advantage membership, also contributed positively. Overall, the combination of better-than-expected earnings, solid performance in key segments, and encouraging future guidance drove the Buy recommendation.
Baxter covers the Healthcare sector, focusing on stocks such as UnitedHealth, Cardinal Health, and CVS Health. According to TipRanks, Baxter has an average return of 2.0% and a 41.55% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $73.00 price target.