CVS may not be selling smokes any more, but its shares are still on fire.
In fact, the No. 2 U.S pharmacy chain's decision to stop selling tobacco products may be helping the cause.
Last week, CVS (CVS) revealed its gross margins improved in the third quarter from the year before. That's something that rivals Rite Aid (RAD) and Walgreen (WAG) can't say as they deal with higher generic drug costs.
CVS's secret? It's no longer selling low-margin tobacco products.
Even though CVS is up about 40% over the past year, a sizable 81% of analysts covering the stock are bullish on it.
One note of caution though: CVS's rapidly rising share price of about $88 is on the verge of brushing up against the Street's average price target of $91.
