Wall Street’s view of CVS
CVS Health (CVS) is a well-covered stock and is tracked by 23 Wall Street analysts. The company is rated a 1.9 on a scale of 1 (strong buy) to 5 (strong sell). Its ratings have improved over the last year, thanks to recent analyst upgrades. The company was rated a 2.2 in September 2017.
CVS was upgraded by Citigroup from “neutral” to “buy” on July 9. Analyst Ralph Biacobbe said, “The risks around the integration of AET and pressures in the retail and pharmacy segments including potential AMZN risk/overhang, but view both as somewhat overstated particularly in the context of heavily discounted valuation.”
The company was also upgraded by Needham (from “buy” to “strong buy”), Morgan Stanley (from “equal-weight” to “overweight”), and Raymond James (from “outperform” to “strong buy”) early this year.
Currently, CVS Health is recommended as a “buy” by 74.0% of analysts and a “hold” by the remaining 26.0% of analysts. There are no “sell” recommendations on the company.
Looking at Walgreens’s ratings
Walgreens Boots Alliance (WBA) is tracked by 27 analysts and is rated a 2.7. It is recommended as a “buy” by 30.0% of analysts, a “hold” by 67.0% of analysts and a “sell” by the remaining 3.0% of analysts.
Needham and Wells Fargo are among the brokers who have set a “buy” rating on Walgreens. Evercore ISI Group, Jefferies, and Morgan Stanley are the brokers that have given a “hold” recommendation, while Bank of America has set a “sell” on WBA stock.
Discussing the stocks’ upsides
While the drugstore stocks have underperformed the broader market, Wall Street continues to be positive on them. CVS Health’s stock price is projected to rise 35.0% to $85.89 over the next 12 months. In comparison, WBA’s stock is likely to witness a 6.0% jump in its share prices to $71.05.
Investors looking for exposure to Walgreens and CVS can consider the Van Eck Retail ETF (RTH), which invests ~9.0% of its portfolio in the two companies.