UBS sees a rosy outlook forward for CVS . The financial institution upgraded the pharmacy inventory to a purchase score from impartial, with analyst Kevin Caliendo lifting his worth goal by 18%, to $79 from $67. Shares of CVS Well being have already surged 53% this 12 months, via Friday’s shut. Caliendo’s up to date goal implies a further 15% upside forward for the inventory. CVS YTD mountain CVS YTD chart “Regardless of the YTD enchancment in shares, we proceed to see incremental upside, each from a long-term EPS perspective, with a number of years of [double-digit] earnings progress forward given a number of pathways (however primarily hinging on the [healthcare benefits] restoration), and from a valuation a number of perspective,” the analyst wrote. “Whereas it stays early within the tenure of the brand new administration workforce, stability in messaging and continued momentum in HCB earnings enchancment (particularly in mild of friends’ challenges) gives us with sufficient conviction at present to make a name on the inventory.” Caliendo famous that his improve follows two robust consecutive quarters for CVS that point out fixes to its health-care advantages section are on monitor. “Critically, the profit cuts and assumptions CVS made round Medicare Benefit (MA) utilization this present plan 12 months have proved to be on-point (significant prior 12 months growth gives consolation), giving us extra conviction within the firm’s capability to forecast and handle pattern,” he added. “That is particularly related as the corporate manages to [reprice] a disproportionate share of multi-year contracts in its group MA enterprise (~50%) this 12 months, which we imagine are acting at a detrimental [mid-single digit] to [high-single digit] margin at present.” Caliendo sees CVS incomes $7.20 per share by the tip of fiscal 12 months 2026, up from a previous estimate of $6.92 and a Wall Road consensus of $7.15. The health-care profit and pharmacy chain is prone to see 14% compound annual progress in its earnings per share via 2028 — whereas the Road solely sees 12% — but sells at a a number of of 9 instances estimated 2026 outcomes, versus a 10-year common of 10 instances, the UBS analysts mentioned.