Story updated at 9:50 a.m. to reflect market activity.
Shares of CVS fell -1.4% to $76.19 in morning trading.
The analyst firm also raised its EPS estimates for the drug store operator through 2015. The company's PBM business can continue to drive growth according to Leerink analysts.
Separately, TheStreet Ratings team rates CVS CAREMARK CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CVS CAREMARK CORP (CVS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 6.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CVS CAREMARK CORP has improved earnings per share by 23.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CVS CAREMARK CORP increased its bottom line by earning $3.76 versus $3.03 in the prior year. This year, the market expects an improvement in earnings ($4.45 versus $3.76).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Food & Staples Retailing industry average. The net income increased by 18.3% when compared to the same quarter one year prior, going from $954.00 million to $1,129.00 million.
- Net operating cash flow has increased to $2,172.00 million or 32.43% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.84%.
- You can view the full analysis from the report here: CVS Ratings Report