Stocks rebounded strongly on Tuesday, recovering losses from the day before and then some after the chairman of the Federal Reserve hinted at the possibility of an interest rate cut. The Dow Jones Industrial Average (^DJI 0.08%) and the S&P 500 (^GSPC 0.25%) both gained more than 2 percentage points.
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CVS outlines rapid expansion of in-store clinics
CVS Health held its investor day today, sharing plans for how it will use its acquisition of Aetna to change the landscape of healthcare, and investors liked what they heard, sending shares up 2.3%. The company will expand its health hubs to 1,500 locations by the end of 2021 and predicts accelerating earnings growth through 2022 and beyond.
CVS' HealthHUB concept includes in-store clinics that can handle about 80% of the scope of a typical primary care practice. The company has tested the concept in the Houston area. It plans to expand into three additional markets this year, and grow across the country in the two years following. Seventy percent of the U.S. population lives within three miles of a CVS pharmacy.
Looking forward, CVS thinks it can find $900 million in cost savings from the integration with Aetna and another $1.5 billion to $2 billion in savings through technology investments and productivity improvements. The company reaffirmed guidance for 2019 and said adjusted earnings per share should grow low single digits in 2020, mid single digits in 2021, and low double digits in 2022.
Uber gets some votes of confidence
The 29 underwriters of Uber's initial public offering (IPO) had their quiet period expire today, and many of the analysts initiated coverage of the stock. Their commentary was largely positive, and shares rose 3.6% to $42.75.
Uber netted nine buy recommendations, eight overweight or outperform ratings, and one neutral call. According to TheFly.com, Oppenheimer highlighted Uber's position as the market leader in ridesharing and online food delivery, and gave the stock a $55 price target. Morgan Stanley believes the company has a long runway of growth ahead and thinks it will approach breakeven in 2022, deserving a price target of $56.
Uber got off to a rough start as a public company, getting priced at the low end of its range and falling in the first two days of trading. But its first public earnings report was solid, and the stock has recovered 18% from its low.