Morgan Stanley Maintains Equal-Weight on CVS/Caremark (CVS)

Morgan Stanley is out with its report today on CVS/Caremark CVS, maintaining Equal-weight. In a note to clients, Morgan Stanley writes, "CVS Caremark scored lowest among major PBMs in our annual benefits manager survey. The option of a 90-day retail or mail Rx proved popular in this year's survey, suggesting that CVS' Maintenance Choice offering has strong potential. Headlines of CalPERS canceling its Medco contract does not appear to be a concern for customers, so CVS may not pick up incremental contracts as investors speculated earlier this year. We believe PBM earnings disappointments remain the primary cloud over CVS valuation. As this survey does not suggest a change in 2011, we maintain our Equal-weight rating. 2012 could hold some hope as a record generic wave and PBM streamlining efforts should help on expenses." Shares of CVS closed Thursday at $38.19, up 1.84% from Wednesday's close.