CVS Health (NYSE:CVS) stock has continued to rally on Wednesday, extending a two-day rally to as much as 8.6%.
The surge follows the pharmacy chain's positive 2024 revenue guidance and the introduction of a new reimbursement model aimed at simplifying drug pricing.
Walgreens Boots (NASDAQ:WBA), a peer in the industry, also saw an increase of up to 4.2%.
Analysts at Bank of America view CVS's adjusted earnings growth expectations as appropriately reset for the intermediate term and believe the new reimbursement model could have a significant impact on the prescription ecosystem.
The firm maintains a Buy rating with a price target of $86.
“Overall, CVS has a differentiated brand versus other health plans (given the retail/consumer footprint) which uniquely positions CVS to engage with members across the continuum. CVS’ introduction of a new CVS Health app that integrates an entire member’s experience into one smartphone application creates optionality for synergies between operating segments and we expect the company to speak about this more over time.”
“Further, CVS’ segment level detail provided us with increased confidence the company can execute against and outperform mid-to-high single digit EPS growth targets.”
CVS's year-to-date decline now stands at 21%.