Citi Likes Shares Of CVS Caremark (CVS)

Citi Investment Research is out with a research report on CVS Caremark CVS and it has a Buy rating, and a $41 price target on shares. In a note to investors, Citi writes, "Florida's Division of State Group Insurance spoke on a public call to discuss its $260 million PBM contract. The finalists for the contract included CVS (the incumbent), CHSI, MHS, and EXRS and the panel weighed the merits of each finalist's "last and final" bid. The panel unanimously recommended MHS for the contract, which we believe was due to Florida's transition to mandatory mail in January and MHS' ability to support the program. The loss was expected for CVS since the company was not able to utilize its Maintenance Choice program (due to FL's mandatory mail) to differentiate itself from competitors. We believe the lost contract will have a (-$0.01) to (-$0.02) impact on 2012 EPS, but we were encouraged by the panel's positive comments towards its relationship with CVS and we expect CVS to have a solid 2012 selling season." Shares of CVS are up 12 cents to $35.56, a gain of 0.3%.