BofA raised the firm’s price target on CVS Health (CVS) to $75 from $63 and keeps a Buy rating on the shares. Aetna can add $3-$4 per share of earnings power over time to the current $6 base, meaning CVS effectively trades at six times normalized earnings “if one simply believes Aetna can get back to normal margins at some point over the next few years,” the analyst tells investors in a post-earnings note. With CVS’ current valuation closer to trough levels, the firm views the risk/reward as “favorable,” the analyst added.
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