Investors Underestimate Power Of This Pieced Flywheel: Analyst Kicks Off Coverage On CVS Health
$CVS
$OSH
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- As a part of a broader coverage of 15 companies in the Healthcare Services sector, Cantor Fitzgerald initiated coverage on CVS Health Corp (NYSE:CVS) with a price target of $87 and an Overweight rating.
- Once pieced together, CVS, Signify Health, Oak Street Health Inc (NYSE:OSH), and Carbon (JV) can create a flywheel that brings in industry-leading, consumer-facing technology and ease of access, enhanced brand value across commercial and Medicare, higher NPS (net promoter score), and significantly more opportunities.
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- The analyst sees potential for a bull scenario of long-term revenue synergies.
- Cantor says adj EPS guided of $9.00 in 2024 and $10.00 in 2025, a 6.6% CAGR off 2022 adjusted baseline of $8.25, assumes low- to mid-single-digit health care benefits and mid-single-digit pharmacy growth, OSH closes in 2023, and SGFY closes in 2Q23 with positive earnings contribution in 2024.
- The analyst estimates bull scenario could generate $10.50-$11.00.
- Under the leadership of Vijay Patel, the analyst writes that the portfolio could grow to an alpha-generating and self-financing $1 billion portfolio. It says the selections represent an astute recognition of competitive and sustainable advantages.
- Price Action: CVS shares are down 0.52% at $72.87 on the last check Friday.