CVS Health (CVS) saw two solid quarters of execution and early signs of progress in fixing its healthcare benefits business, UBS Securities said in a note Monday.
The company last month reported Q2 non-GAAP earnings and revenue above analyst expectations and raised its 2025 adjusted EPS guidance.
The brokerage said it now models earnings per share compound annual growth of 14% through 2028, above the 12% consensus forecast. The benefit cuts and assumptions CVS made around Medicare Advantage utilization this year "have proved to be on-point."
The firm also projects CVS will return to a mid-3 times leverage ratio by Q4 2026, providing room for buybacks to further support earnings growth.
UBS upgraded CVS to buy from neutral and raised the company's price target to $79 from $67.
Shares of CVS Health were up 2.5% in recent trading.
Price: 70.32, Change: +1.72, Percent Change: +2.51
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