This post was originally published on this site
“We would add here,” said the analysts. “Concerns over a number of issues, including PBM transparency and 340B volumes among others, have driven shares down ~25% since Feb., which is much more than a worst-case EPS impact of 16% (lose all 340B vol. & 20% of PBM AOI), or $1.42 to our 2024 adjusted EPS estimate of $9.03.”
CVS shares have fallen more than 24% in 2023 and over 25% in the last 12 months, trading above the $69 mark.
They said the shares, which are currently trading near 10-year trough multiples, already bake in more than the worst-case scenario from the headwinds.
“At current levels, we view shares as very attractive, given they do not reflect the likelihood of CVS returning to low double-digit/mid-teens adjusted EPS growth starting in 2025, and recommend adding here,” they concluded.
