NEW YORK (TheStreet) -- CVS Health Corp.'s (CVS) - Get CVS Health Corporation Report price target was raised to $122 from $119 at Oppenheimer this morning. The firm's rating remains unchanged at "outperform."
The firm made this update due to potential acquisitions. CVS closed on its Omnicare acquisition on August 18 and expects to close a Target (TGT) - Get Target Corporation Report pharmacies and clinics acquisition by the end of 2015 or in 2016, Oppenheimer said.
"While there are still uncertainties on the final accretion and moving parts in estimates, we are taking a shot at the combined model and publishing CY15 and CY16 estimates with the acquisitions," the firm said in a note.
Oppenheimer's earnings estimate for 2016, taking Omnicare and Target Rx/clinics into account, rose to $6.08 from $5.93 per share.
Shares of CVS were down 1.05% to $104.10 in mid-morning trading on Friday.
Separately, TheStreet Ratings team rates CVS HEALTH CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CVS HEALTH 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, growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CVS HEALTH CORP has improved earnings per share by 5.7% 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 HEALTH CORP increased its bottom line by earning $3.96 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($5.16 versus $3.96).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food & Staples Retailing industry average. The net income increased by 2.1% when compared to the same quarter one year prior, going from $1,246.00 million to $1,272.00 million.
- Net operating cash flow has increased to $1,037.00 million or 15.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.61%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.17% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: CVS Ratings Report