CVS has shed 19% so far this year and is trading near six-year lows
Shares of CVS Health Corp (NYSE:CVS) are moving lower in this morning's trading, last seen down 0.3% at $52.37. The drugstore chain received a price-target cut to $75 from $90 at Raymond James, and although Guggenheim initiated coverage with a "buy" rating, the firm lowered its price target by 25% to $63, with the latter noting it "underestimated the structural and integration issues facing the business."
On the charts, CVS has had a rough go, with the stock already down 19% year-to-date, and losses accelerating after a late-February plunge. More recently, the security has been pressured by its 30-day moving average and the $54 level -- home to its March 27 bear gap close, and not far off its recent April 2 six-year bottom at $51.77.
In spite of this, call options traders have been flocking to CVS. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows CVS with a 50-day call/put volume of 3.24, ranking in the 100th annual percentile. This suggests calls have been bought over puts at a faster-than-usual clip, and a shift in sentiment among speculators could create headwinds for the stock.
More bearish analyst notes could turn up the heat on CVS stock, too, considering the majority of the 20 firms covering the security sport "buy" or "strong buy" ratings. Plus, the equity's average 12-month price target of $72 stands at a 37% premium to current levels, which leaves plenty of room for downgrades and/or more price-target cuts on CVS stock.