NEW YORK (TheStreet) -- Shares of CVS Health (CVS) are climbing, higher by 0.73% to $92.98 in late morning trading, after the pharmacy chain had its price target raised by analysts at JPMorgan Chase to $108 from $92, following yesterday's analyst day presentation.
The firm maintained its "overweight" rating on shares, saying it remains bullish on outlook.
The pharmacy operator raised its quarterly dividend, announced a new share buyback program and issued EPS growth for next year, helped by strength in specialty drugs.
The company announced that it would raise its quarterly cash dividend by 27% to 35 cents per share.
CVS added that its stock repurchase plan covers as much as $10 billion in shares, and will be completed over a multiyear period.
The company issued 2015 earnings guidance of between $5.05 to $5.19 per share, compared to analysts' forecasts of $5.11 per share. CVS also forecast 2015 cash flow of $5.9 billion to $6.2 billion, using some of it for acquisitions and other investments.
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, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, CVS's share price has jumped by 33.44%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CVS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CVS HEALTH CORP's earnings per share declined by 20.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CVS HEALTH CORP increased its bottom line by earning $3.75 versus $3.03 in the prior year. This year, the market expects an improvement in earnings ($4.50 versus $3.75).
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that CVS's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Food & Staples Retailing industry and the overall market, CVS HEALTH CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: CVS Ratings Report