CVS Health (CVS) shares rose nearly 3.84% Wednesday after the healthcare company was initiated with an outperform rating and $76 price target by Bernstein analyst Lance Wilkes.
The price target represents a 41% upside from the stock's opening price Wednesday of $55.61.
Wilkes said he believes that CVS is currently undervalued with its balanced near-term earnings growth, long-term prospects for Aetna and a retail care delivery strategy making it an attractive company.
The analyst believes that CVS and Aetna will have leading capability in value-based care, but Wilkes also believes CVS will need to deploy $10 billion in capital over the next five to seven years to build capability.
While Wilkes expects CVS/Aetna to be the long-term winner in healthcare, the company's retail pharmacy business is expected to have stable volume growth but compressed volumes.
CVS is a holding in Jim Cramer's Action Alerts PLUS charitable trust.
A Special Invitation: Do you want to learn more about planning for and living retirement from the nation's top experts, including Ed Slott and Robert Powell, the editor of TheStreet's Retirement Daily? Want to learn how to create tax-efficient income in retirement and how to manage and mitigate all the risks you'll face in retirement? Then sign up to attend TheStreet's Retirement Strategies Symposium on April 6 in New York City. For a limited time, you can attend this extraordinary symposium for $149 - a cost savings of $50 off the general admission price of $199.
You can see the full day's agenda, learn about the guest speakers and sign up HERE for this special event.