Goldman Sachs reported on Tuesday that it has downgraded drugstore chain, CVS Caremark Corporation (CVS).
The firm has lowered its rating of CVS from “Buy” to “Neutral,” and has reiterated a $57 price target. This price target suggests a 7% increase from the stock’s current price of $52.63.
An analyst from the firm commented, “CVS has a solid foundation, and bright intermediate-term prospects, notably from healthcare reform, which should drive accelerating script growth in 2014 and beyond. That said, for the first time since we launched, incremental near-term catalysts are lacking, earnings growth is slated to decelerate, and we expect EBIT growth to moderate as discrete earnings drivers abate. … Our $57, 12-month price target is based on risk/reward (relative P/E). Upside risks include WAG execution, generic benefits, and healthcare reform. Downside risks include front-end sales and reimbursement pressures.”
CVS shares were down 48 cents, or -0.91% during premarket trading Tuesday. The stock has increased 15% in the past year.
The Bottom Line
Shares of CVS Caremark Corporation (CVS) have a 1.71% yield, based on Monday’s closing price of $52.63.
CVS Caremark Corporation (CVS) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.