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CVS to remain in the 'penalty box' on weak earnings, market share losses, Jefferies says

A CVS location in New York.
Spencer Platt | Getty Images
A CVS location in New York.

A Jefferies analyst on Monday rated shares of CVS Health as a hold in new coverage, predicting weak earnings in 2017 as the firm struggles with market share losses in its pharmacy business.

"The company's recently-announced script and market share losses on the retail pharmacy side of its business present a meaningful revenue and earnings headwind that in our view, has reset CVS's growth outlook," equity analyst Brian Tanquilut wrote in a research note. "The company will be unable to deliver the positive earnings surprises in 2017 that are necessary to get it out of the investor penalty box."

This year, shares of CVS are down 18 percent compared with a gain of nearly 11 percent for the S&P 500 index. The previous Jefferies analyst had a buy rating on the stock.