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CVS Caremark’s Target, Estimates Boosted at Jefferies; Strong Results, Reasonable Valuation (CVS)

Drug store chain operator CVS Caremark Corporation ( CVS ) on Thursday received some continued bullish support from analysts at Jefferies & Co.

The firm maintained its "Buy" rating on CVS and lifted its price target from $50 to $54. That new target suggests a nearly 16% upside to the stock's Wednesday closing price of $46.69.

A Jefferies analyst commented, "CVS reported another strong Q fulfilling our 2012 thesis that it would beat and raise throughout the year. The looming question is what CVS will do for an encore. While compares get more difficult, CVS' advantaged business model, significant cash flow and strong management team suggest FY13 will be another successful year, likely driven by a number of smaller catalysts. This, plus a modest valuation, implies the equity is undervalued."

Accordingly, the firm also lifted its earnings estimates for the company through 2013.

CVS Caremark shares were mostly flat in premarket trading Thursday. The stock has gained more than 14% since the beginning of 2012.

The Bottom Line

Shares of CVS Caremark ( CVS ) have a 1.39% dividend yield, based on last night's closing stock price of $46.69. The stock has technical support in the $42-$44 price area. The stock is trading near the all-time high price levels of $48-$49 a share.

CVS Caremark Corporation ( CVS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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