Argus Trims CVS Health (CVS) PT to $90 Amid Medicare Advantage Rate Uncertainty

CVS Health Corporation (NYSE:CVS) is one of the most undervalued large cap stocks to invest in now. On January 28, Argus reduced its price target for CVS Health to $90 from $91 while maintaining a Buy rating. Despite a nearly 15% stock decline following the Centers for Medicare and Medicaid Services’ proposal for a flat 2027 Medicare Advantage reimbursement rate, the firm anticipates an upward revision before the final rate is set in April 2026. Argus suggested that even if the final increase falls short of the previous year’s 5.1%, CVS Health’s diversified business model should help mitigate the impact more effectively than its pure-play health insurance competitors.

Furthermore, on January 27, Bank of America also lowered its price target for CVS Health to $95 from $100 while maintaining a Buy rating following the release of the 2027 Medicare Advantage Advance Notice. The firm noted that the projected net all-in rate of 2.54% significantly trails market expectations of 4% to 6%, presenting a hurdle for the company’s margin expansion goals.

The firm estimates that if these rates are finalized without adjustments to benefits, CVS Health Corporation (NYSE:CVS) could face an unmitigated headwind exceeding $1 billion in Medicare Advantage revenue and margin. However, BofA remains optimistic, pointing out that final rates have historically improved upon the initial proposal in 64% of cases over the last 14 years.

CVS Health Corporation (NYSE:CVS) provides health solutions in the US. It operates through Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments.

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Disclosure: None. This article is originally published at Insider Monkey.