Mizuho reiterated an Outperform rating and $120.00 price target on CVS Health (NYSE:CVS) as the Financial Times and Wall Street Journal reported that CVS is considering a spinoff of its retail pharmacy business. The stock trades at $91.41, below Mizuho's target.
The proposed spinoff would separate the mail-order pharmacy, retail pharmacies, and MinuteClinic providers into a new company, according to analyst Ann Hynes. A potential announcement could come as soon as tomorrow morning with the company's third-quarter 2026 results.
Mizuho said the decision appears driven by legislative and legal pressures on vertically integrated healthcare companies and pharmacy benefit managers, as well as a desire to unlock value in the health insurance business.
Raymond James maintains an Outperform rating with a $120 price target. BofA Securities reiterated a Buy rating with a $110 price target and noted the potential separation could result in a separate listing by 2028. Cantor Fitzgerald maintains an Overweight rating with a $110 price target.
TD Cowen estimates CVS will face headwinds from declining Medicare Advantage star ratings. The firm projects CVS Health's 4-star rated plans enrollment will drop to 70% in 2027 from 82% in 2026, with an estimated impact of approximately $720 million in 2028. Options data compiled by Bloomberg suggests CVS shares may move 5.8% upon earnings release.
CVS has paid dividends for 56 consecutive years.