Why CVS Caremark (CVS) Is Up Today

NEW YORK (TheStreet) -- CVS Caremark  (CVS) was rising 2.69% to $68.74 on Tuesday afternoon after the second-largest drugstore chain in the U.S. raised its first-quarter guidance despite the company's recent announcement that it would stop selling tobacco products.

CVS said that the removal of tobacco products would cost $2 billion in annual revenue, along with an earnings per share reduction of six to nine cents per share in the fiscal year 2014, according to The Associated Press. But the company also said business is healthy enough that these hits would not necessitate lower guidance; in fact, it raised its first-quarter guidance to a range of $1.03 to $1.06 per share from a range of 96 cents to 99 cents a share. This surpassed analysts' expectations of 98 cents a share, according to FactSet.

The company also posted EPS and revenue for the fourth quarter that edged analysts' expectations. Net revenues increased 4.6% to a record $32.8 billion, while adjusted EPS increased 15.8% to $1.12. Analysts had expected EPS of $1.11 on $32.67 billion in revenue.

Must See: Quick Take: Pharmacy Revenue Helps Boost CVS Caremark's Earnings More Than 12%

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."

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