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Analyst issues bat signal for CVS

May 14, 2009

CVS Caremark is set to meet with analysts and investors in New York on Friday, just days after it posted quarterly results, gave its forecasts and held its annual meeting.  How much more can the company say?  If it is up to some analysts, a lot more could come from the nearly four hours of presentations, especially about the pharmacy benefits business and how it is aligned with CVS stores. 

Jefferies & Co’s Scott Mushkin also said the company could use some better PR to counter some recent articles and angst from competitors.  Items like those might make one think of CVS as the Joker from a Batman movie, Mushkin told clients in a research note on Thursday. 

the-joker“Why the company does not do more to counteract clearly false and/or misleading statements is a mystery. We do know, however, that it needs to change or these efforts by competitors, unions and other entrenched special interests could eventually do great harm to shareholders.

Reminiscent of Wal-Mart, which earlier this decade stood dumbfounded as entrenched interests tore at its reputation due to its market strength and competitive advantages, CVS also looks impotent based on a rising swell that is determined to use any and all means to tear it down. It is time for the company to launch a meaningful counter assault.

Indeed, CVS is not the joker, it’s Batman … and needs to address Gotham City on Friday,” Mushkin said.

(Reuters photo)

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