CVS Health Target Raised to $94, Citing 23% Upside on PBM Reforms
Bernstein upgraded CVS Health to Outperform with a price target of $94 from $91, implying 23% upside on Medicare Advantage turnaround and steadier pharmacy earnings. It forecasts Aetna profits to nearly double over three years and raises the NTM EPS multiple to 12x as PBM reforms cut uncertainty.
1. Bernstein Upgrade
Bernstein lifted CVS Health from Market Perform to Outperform, raising its price target to $94 from $91 and projecting 23% upside for shareholders.
2. PBM Reform Impact
The upgrade reflects reduced uncertainty around pharmacy benefit manager reforms, with transparency bills and model changes expected to stabilize PBM margins and support higher valuations.
3. Medicare Advantage Momentum
Analysts highlighted CVS Health's Aetna unit, forecasting nearly double earnings over the next three years as Medicare Advantage margins normalize, driving growth in the insurance segment.
4. Valuation and Earnings Outlook
Bernstein nudged its forward EPS multiple to 12x based on projected 9% CAGR in EPS from 2027 to 2029, while anticipating modest growth in 2026 before a rebound.