Shares of CVS Caremark Corp. continued climbing Friday, a day after it delivered a 2013 forecast and announced a dividend increase that left analysts raving about growth prospects for the drugstore chain and pharmacy benefits manager.
THE ANALYSIS: The company "lit up the room" at its investor day presentation with a bright outlook and plans to create more value for shareholders, BMO Capital analyst Dave Shove said in a research note, referring to the share repurchase plan and dividend increase.
Credit Suisse analyst Edward J. Kelly raised his price target on the stock to $55 from $50. He wrote in separate research note that the company's 2013 guidance was surprising, and it fueled a story that looked like it was "running out of gas in 2013."
Jefferies analyst Scott A. Mushkin said in another note he was "strongly reiterating" his "Buy" rating on the stock. He said implementation of the health care overhaul could lead to more customers and higher-than-expected earnings per share growth for the company.
"While there remains a tremendous amount of uncertainty around the implications of (the overhaul), what is becoming increasingly evident to us is that CVS Caremark has the potential to capture greater market share and see a jump in covered lives," the analyst wrote.