CVS Health Corp (NYSE:CVS) Announces Completion of Target (NYSE:TGT) Deal & Raises 2016 Forecast


CVS Health Corp (NYSE:CVS) shares are trading up today after the company announced that they have completed their acquisition of Target’s (NYSE:TGT) pharmacy business for $1.9 billion, and released a revision of the company’s 2016 forecast.

Many of us are familiar with Target’s pharmacy, which is usually located within their retail stores. This new deal will put CVS Health Corp (NYSE:CVS) in charge of these in-store pharmacies and rebrand them for the company’s name.

This news comes on top of a positive outlook released by the company this morning. CVS Health Corp (NYSE:CVS) has raised their 2016 earnings forecast and increased dividend payments. Originally adjusted earnings were expected to be between $5.68 and $5.88 per share for 2016, but this has now been raised (on the low end) to between $5.73 and $5.88.

The stock is up 2.12% or $1.96 following the news, hitting $94.55 per share. About 2.43M shares traded hands. CVS has declined 7.23% since May 13, 2015 and is downtrending. It has underperformed the S&P500 by 3.56%.

From a total of 8 analysts covering CVS Health (NYSE:CVS) stock, 6 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 75% of the ratings are positive. The highest target price is $132 while the lowest target price is $105. The mean of all analyst targets is $117.50 which is 24.27% above today’s ($94.55) stock price. CVS Health was the topic of 12 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. S&P Research maintained shares on November 2 with a “Strong Buy” rating. Evercore reinitiated shares with a”Buy” rating and a $118 target share price in their report from an August 19. JP Morgan maintained CVS stock in a recent report from November 2 with a “Overweight” rating. Finally, Deutsche Bank maintained the stock with a “Hold” rating in a report they issued on an August 20.

The institutional sentiment increased to 1.21 in Q2 2015. It’s up 0.15, from 1.06 in 2015Q2. The ratio improved, as 62 funds sold all their CVS Health Corp shares they owned while 529 reduced their positions. 104 funds bought stakes while 611 increased their total positions. Institutions now own 922.81 million shares which is 0.74% more than the previous share count of 916.04 million in 2015Q2.

Dsc Advisors L.P. holds 10.2% of its total portfolio in CVS Health Corp, equating to 217,919 shares. Kdi Capital Partners Llc owns 292,305 shares representing 8.2% of their total US portfolio. Moreover, Cabot has 7.84% of their total portfolio invested in the company, equating to 135,106 shares. The Missouri-based Cortland Associates Inc Mo has a total of 7.82% of their portfolio invested in the stock. Veritas Investment Management Llp, a United Kingdom-based fund reported 349,411 shares owned.

Since March 23, 2015, the stock had 0 insider purchases, and 2 insider sales for a total of $7.93 million in net activity. Boratto Eva C sold 22,107 shares worth $2.44 million. Bisaccia Lisa sold 49,908 shares worth $5.49 million. Sussman Andrew sold 17,638 shares worth $1.81M. Brennan Troyen A sold 33,384 shares worth $3.42M. The insider Brown C David Ii sold 25,000 shares worth $2.61 million.

CVS Health Corporation, together with its subsidiaries, is a pharmacy company. The company has a market cap of $103.12 billion. The Firm operates through three business divisions: Pharmacy Services, Retail Pharmacy and Corporate. It has 21.25 P/E ratio. The Pharmacy Services segment provides a range of pharmacy benefit management services and operates under the CVS/caremark Pharmacy Services, Novologix and Navarro Health Services names.