CVS’ Business Segments Outperforming

Analysts at Citigroup reiterate their "buy" rating on CVS Caremark Corp CVS. The target price for CVS is set to $40. Each business segment of CVS is outperforming. According to Citigroup, “Management was very upbeat about the 2011 selling season and reiterated that net new business was positive YTD. We believe CVS has been able to differentiate and win new business as a result of its RxConnect, Consumer Engagement Engine, and Maintenance Choice initiatives…CVS is also introducing new products in the California stores that should have a positive impact on SSS in 2H10.” “Management is focused on implementing two merchandising programs to increase trips to the store. First, CVS is clustering stores into 3 to 4 clusters (i.e. Urban Cluster) in order to better tailor merchandise to the local demographics. Second, management is increasing the percent of consumables in its stores, such as mayonnaise and mustard. In some urban stores they will add prepared salads and sandwiches,” the analysts add. CVS is also looking at various ways to improve its gross margins. More Analyst Ratings here