10 Oversold Blue Chip Stocks to Buy Now

2) CVS Health Corporation (NYSE:CVS)

Market cap (As of 25 October): $71.0 billion

Forward P/E (As of 25 October): 7.62x

% Decline on a YTD Basis: ~30%

Number of Hedge Fund Holders: 60

CVS Health Corporation (NYSE:CVS) offers health solutions in the US.

CVS Health Corporation (NYSE:CVS) has a diverse portfolio of healthcare assets, which includes retail pharmacies, PBM services through CVS Caremark, and health insurance offerings via its Aetna division. Its integrated model targets to provide coordinated care throughout its various healthcare touchpoints. Moving forward, CVS Health Corporation (NYSE:CVS) continues to focus on implementing strategic changes in a bid to improve profitability in MA business. Such initiatives include reducing supplemental benefits and adjusting plan designs to align closely with its competitors.

The company’s integrated healthcare model, which combines retail pharmacy, PBM services, and health insurance offerings, places it well to potentially capture significant value throughout the healthcare value chain. Through leveraging the various touchpoints with patients, CVS Health Corporation (NYSE:CVS) can offer more coordinated and comprehensive care. This can help in improving health outcomes, increasing customer satisfaction, and potentially lowering overall healthcare costs.

The diverse portfolio of healthcare services enables CVS Health Corporation (NYSE:CVS) to cross-sell products and services to existing customers. This will eventually increase revenue per customer and improve retention rates. Analysts at Barclays raised the shares of the company from an “Equal-weight” rating to an “Overweight” rating, increasing the target price from $63.00 to $82.00 on 10th October.

Coho Partners, an investment management company released its second quarter 2024 investor letter. Here is what the fund said:

“While we believe each of those companies is performing in line with or better than our expectations and that the moves lower are unjustified, both CVS Health Corporation (NYSE:CVS) and Nike reported disappointing performance in recent results. In CVS’ case, management gave an optimistic outlook to 2024 at its December Investor Day, which we believed was consistent with our expectations. Unfortunately, management misestimated its medical loss ratio and the anticipated profitability in its book for Medicare Advantaged lives. This triggered a position paper violation, as the company’s financial flexibility now looks constrained in both 2024 and 2025.”