CVS (CVS) has joined health insurance providers UnitedHealth (UNH) and Cigna (CI) in a lawsuit against the Federal Trade Commission (FTC). The three healthcare companies are contesting the government agency’s recent insulin price case. In September 2024, the FTC sued companies that act as middlemen in the pharmaceutical sales space, accusing them of artificially inflating insulin prices as a profit increasing measure.
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The original lawsuit named CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx as guilty parties. Now all three companies are alleging that the case is unconstitutional.
Is the News Impacting These Stocks?
As of now, CVS stock hasn’t been impacted by news of the lawsuit. The story broke yesterday afternoon, slightly before CVS closed out the day in the green. Shares popped today in premarket trading, continuing the winning streak that the stock has been on for the past five days, with gains of 5%, even as news of Donald Trump’s cabinet picks has sparked volatility for healthcare stocks.
While Cigna stock remained stagnant during premarket hours, UNH stock also rose slightly. This indicates that so far, news of the lawsuit isn’t negatively impacting any of the companies involved. If the case against the FTC is successful, all three companies stand to benefit substantially, as they would be able to continue providing insulin, a product upon which many diabetic people depend, at extremely high prices.
It remains unclear if the lawsuit will impact analyst sentiment towards any company involved. Yesterday, Truist Financial analyst David S Macdonald reduced his CVS stock price target from $76 to $67, though he maintained a Buy rating. One day earlier, he reaffirmed a Buy rating on Cigna, maintaining a $420 price target. No analysts have issued any new takes on UNH stock following the lawsuit news.
Wall Street Is Mostly Bullish on CVS Stock
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CVS stock based on 11 Buys and four Holds assigned in the past three months, as indicated by the graphic below. While share prices have fallen 14% over the past year, the average CVS price target of $67.36 per share implies 19% upside potential.
