Why CVS Stock Thrashed the Market on Thursday

For the second day in a row, CVS Health's (NYSE: CVS) stock price saw a satisfying jump on Thursday. It closed the day almost 5% higher, on the back of both lingering optimism and news of another in a series of analyst price target raises. That improvement was markedly better than the performance of the S&P 500 (SNPINDEX: ^GSPC) on the day; it gained slightly over 1%.

One upgrade and a wave of price target increases

The positive investor sentiment on CVS is due to the pharmacy chain operator's fourth-quarter earnings report, which were published early Wednesday morning. The company squeaked past the consensus analyst estimate for revenue, and crushed that for non-GAAP (generally accepted accounting principles) adjusted net income.

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Following that, a clutch of analysts wasted little time in raising their price targets on CVS stock -- in one case, even upgrading their recommendation.

This was Leerink Partners' Michael Cherny, who now feels the shares are worthy of an outperform (read: buy) rating; previously he had recommended the company only as market perform (hold). According to reports, he felt that the company's important units -- particularly its Aetna insurance business -- are improving notably, and the stock is now undervalued.

It's buy time, according to some pundits

Cherny's peers weren't as willing to modify their recommendations, yet a handful of them raised their price targets. One of the more aggressive bumps was made by David MacDonald of Truist Securities, who now believes CVS is worth $76 per share, well up from his preceding level of $60. MacDonald reiterated his buy recommendation.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Truist Financial. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.