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Street View: CVS split could be the right call, but raises questions

By Reuters News

** CVS Health CVS.N said on Wednesday it will split in two, separating its retail pharmacies from the Aetna insurance business and pharmacy-benefit operations in a major unwinding of the $117 billion healthcare conglomerate it spent years building


CONCERNS REMAIN

** BofA Global Research ("buy," PO: $100) says that "excluding the announced separation, we believe the update broadly de-risks the setup heading into 2027"

** Jefferies ("buy," PT: $103) says the decision to separate businesses ahead of an "upcoming wave of local laws" challenging CVS's strategy is the right move that could reduce overhang on the stock

** Barclays ("overweight," PT: $108) says a primary investor concern is on the lack of financial detail around the break up, which is at odds with the minimum $500 mln cost synergy outlined when CVS acquired Caremark 20 years ago

** RBC Capital Markets ("outperform," PT: $113) says the announcement represents a "surprising strategic departure" from last year's investor day; says several important questions remain

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