CVS Health Corporation (CVS)

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Earnings Preview: CVS Health Corp. (NYSE: CVS)
By: 24/7 Wall St. | October 31, 2022

• Here is a preview of four companies on deck to report quarterly results before markets open on Wednesday.

CVS Health

The country’s third-largest provider of health care plans, CVS Health Corp. (NYSE: CVS) has seen its stock price rise by about 5% in the past 12 months. While the company, also the second-largest drugstore operator in the United States, has outperformed rival Walgreens over the past decade, its 10-year return of about 156% pales beside the 1,060% gain of health insurer United Health Group. That is probably the main reason the company is trying to break into the primary care market by beginning to establish clinics in its 1,100 retail stores and working to gain a piece of the insurance market through its acquisition of Aetna.

Analysts remain bullish on the stock, with 21 of 27 brokerages having a Buy or Strong Buy rating. The rest rate the shares at Hold. At a share price of around $93.80, the stock’s upside potential based on a median price target of $120.00 is about 28%. At the high price target of $130, the implied upside is 38.6%.

The consensus revenue estimate for the third quarter is $76.78 billion, down 4.8% sequentially but 4.1% higher year over year. Adjusted EPS are forecast at $1.99, down 16.9% sequentially and up two cents year over year. For the full 2022 fiscal year, analysts are looking for EPS of $8.55, up 1.77%, and revenue of $312.35 billion, up about 6.9% year over year.

CVS stock trades at about 11.0 times expected 2021 EPS, 10.4 times estimated 2023 earnings of $9.06 and 9.5 times estimated 2024 earnings of $9.88 per share. The stock’s 52-week range is $86.28 to $111.25. CVS Health pays an annual dividend of $2.20 (yield of 2.34%). Total shareholder return for the past 12 months was 7.7%.

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