Leading retail pharmacy chain CVS Health (NYSE:CVS) is exploring the acquisition of Oak Street Health (NYSE:OSH) in a deal valued at more than $10 billion, including debt, Bloomberg reported. Shares of Oak Street, which operates primary care centers for Medicare recipients, surged nearly 37% in Tuesday’s pre-market trading.
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The deal could be reached within weeks. Nonetheless, the Bloomberg report cautioned that the deal could fall through if the ongoing discussions fail. Oak Street currently operates over 160 value-based primary care centers across 21 states. CVS is strengthening its presence in the primary care space to fight growing competition. Last year, retail giant Amazon (NASDAQ:AMZN) announced an agreement to acquire primary-care provider One Medical for $3.9 billion.
CVS recently announced $8 billion acquisition of Signify Health, which is expected to close in the first half of 2023. On Monday, CVS’ corporate venture arm made a $100 million investment in Carbon Health to accelerate the digital health startup’s expansion into new markets. As part of the deal, CVS will test Carbon Health’s operating model inside select CVS Health locations, leveraging the startup’s software to enhance patient experience.
Meanwhile, on Monday, CVS stated that it expects to exceed its full-year 2022 revenue guidance range of $309 billion to $314 billion. Moreover, it projects 2022 adjusted EPS to be at the high end of its guidance range of $8.55 to $8.65, mainly due to certain non-operating items, including a lower share count.
What is the Forecast for CVS Stock?
Wall Street’s Strong Buy consensus rating for CVS stock is based on 12 Buys and two Holds. The average CVS stock price target of $115.57 implies 26.3% upside potential. Shares are down about 11% over the past year.
