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Rhode Island-based CVS Health Corporation (CVS) offers pharmacy benefit management services, mail order, retail and specialty pharmacy, disease management programs, and retail clinics. With a market cap of $72.1 billion, CVS Health operates through Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments.
While the healthcare giant has underperformed the broader market over the past year, it has observed a massive surge recently and outperformed the market on a YTD basis. CVS has declined 22.6% over the past 52 weeks and surged 26.8% on a YTD basis compared to the S&P 500 Index’s ($SPX) 22.6% gains over the past year and 2.7% returns in 2025.
Narrowing the focus, CVS has lagged the Health Care Select Sector SPDR Fund’s (XLV) 3.9% gains over the past year but notably outperformed XLV’s 5.9% surge on a YTD basis.
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The recent rally in CVS stock is primarily driven by the healthcare sector rotation which has positively impacted several other healthcare stocks. Additionally, CVS has experienced a significant increase in interest from institutional investors, contributing to the company's market cap growth in January.
Notably, CVS stock soared by 11.3% after the release of its Q3 results on Nov. 6, as the company exceeded Street's earnings and topline expectations. CVS reported a robust 6.3% year-over-year growth in total revenues to $95.4 billion, surpassing consensus estimates by 2.8%. Although its adjusted operating income declined significantly by 42.8% compared to the same period last year to $2.5 billion, this decline was anticipated. Moreover, CVS’ adjusted EPS of $1.09 exceeded consensus estimates by 1.9%.
CVS is set to announce its fiscal 2024 results in the upcoming month, and analysts expect CVS’ earnings to decline 40.7% year-over-year to $5.18 per share. Its earnings surprise history is mixed. While the company has surpassed the consensus estimates thrice over the past four quarters, it has missed the projections on one other occasion.
CVS Health has a consensus “Moderate Buy” rating overall. Out of the 23 analysts covering the stock, 14 recommend “Strong Buy,” two advise “Moderate Buy,” and seven suggest a “Hold” rating.
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This configuration is slightly more bullish than two months ago when 13 analysts recommended “Strong Buy” ratings.
On Jan. 27, Evercore ISI analyst Elizabeth Anderson maintained an “Outperform” rating while raising the price target to $65.
While CVS' mean price target of $64.64 suggests a 13.6% premium to current price levels, its street-high target of $80 indicates a staggering 40.6% upside potential from current price levels.