CVS break-up reports ‘smell of desperation,’ says Deutsche Bank

Deutsche Bank says reports that CVS Health is exploring a break-up has the “smell of desperation.” Bankers have been reportedly been retained by the board, making Deutsche Bank question whether or not the process includes the management team. The firm says the news comes a day after the Wall Street Journal reported that an activist hedge fund was meeting with CVS after having taken a large position and was planning to push the company for change. It believes other activist investors are also lining up at CVS’s door. The company’s more aggressive evaluation of strategic alternatives is overdue, but its value has been diminished because of poor execution, the analyst contends. As such, Deutsche is not sure “how much value can be salvaged in the short to medium term.” It keeps a Hold rating on CVS Health with a $63 price target