Cantor Fitzgerald: CVS Health Corporation's (CVS.US) profit shows signs of improvement, target price raised to $71.

Cantor Fitzgerald has upgraded its rating on CVS Health Corporation (CVS.US) from "neutral" to "buy" and raised its 12-month target price from $62 to $71, after this managed healthcare giant reported better-than-expected fourth quarter 2024 earnings. With CVS Health Corporation's first full quarter earnings under new CEO David Joyner's leadership, Cantor believes the company has the "right team" in place to revitalize its insurance business Aetna and withstand challenging regulatory and retail environments. Additionally, analysts have more confidence in CVS Health Corporation's ability to restore normal medical insurance margin profitability by 2027. Analysts note that Aetna's implied P/E ratio is undervaluing the company's overall business. Given the early signs of improving profit margins, the company should not be trading at a discount near historical P/E levels. Previously, CVS Health Corporation reported better-than-expected fourth quarter financial results, mainly driven by growth in its healthcare benefits division, which includes Aetna and its pharmacy and consumer health segments. The company's adjusted diluted earnings per share for the fourth quarter were $1.19, surpassing analysts' expectations of $0.91 according to FactSet. Quarterly revenue was $97.71 billion, up from $93.81 billion in the same period last year, exceeding analysts' expectations of $97.09 billion. For 2025, the company forecasts adjusted diluted EPS of $5.75 to $6.00, while FactSet analysts expect $5.86.