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CVS Health Q2 Preview: Can the Earnings Streak Continue?
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The Zacks Retail – Pharmacies and Drug Stores Industry has held up relatively well year-to-date, declining 10.7% in value vs. the S&P 500’s decline of roughly 12.5%. The industry is currently ranked in the bottom 30% of all Zacks Industries.
A widely-recognized name in the industry is CVS Health (CVS - Free Report) . CVS Health is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care. In addition, the company is slated to release 2022 Q2 results before the opening bell on Wednesday, August 3rd.
Currently, the company is a Zacks Rank #3 (Hold) with an overall VGM Score of an A. Let’s take a closer look at how things stack up for the pharmacy giant heading into the print.
Share Performance & Valuation
Year-to-date, CVS shares have been highly defensive in nature, declining just 5.4% and easily outperforming the general market.
Image Source: Zacks Investment Research
Upon widening the timeframe to encompass the last year of share performance, we can see that CVS shares have been more robust than the general market for some time now, increasing nearly 20% in value.
Image Source: Zacks Investment Research
The positive price action of CVS shares relative to the S&P 500 is undoubtedly a positive, indicating that investors have defended the stock at a high level.
In addition, CVS shares could be undervalued, further bolstered by its Style Score of an A for Value. Its current forward earnings multiple sits enticingly at 11.5X, just above its five-year median of 10.2X and reflecting an attractive 39% discount relative to the S&P 500.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have primarily been bullish for the quarter to be reported, with two of the three estimate revisions being upwards over the last 60 days. The Zacks Consensus EPS Estimate resides at $2.16, penciling in a 10% decrease in quarterly earnings year-over-year.
Image Source: Zacks Investment Research
However, the top-line is in much better shape. CVS is projected to rake in a mighty $76.6 billion for the quarter, a solid 5.5% uptick compared to year-ago quarterly sales of $72.6 billion.
Quarterly Performance & Market Reactions
Bottom-line beats are the name of the game for CVS; the company hasn’t reported quarterly EPS below the Zacks Consensus EPS Estimate since 2015. Just in its latest quarter, CVS recorded a solid 6.4% EPS beat.
Top-line results have been just as stellar – CVS has chained together 16 consecutive top-line beats dating back to 2018. Below is a chart of the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
The market has had mixed reactions following the company’s quarterly reports as of late, with shares moving downwards three times and upwards three times over its last six bottom-line beats.
Putting Everything Together
CVS shares have been much stronger than the general market year-to-date and over the last year. In addition, the company sports attractive valuation levels.
Earnings are forecasted to dip by double-digits, but the top-line looks to grow modestly – a reflection of margin compression.
The company has repeatedly reported top and bottom-line results above expectations, but as of late, the market has had mixed reactions following the quarterly reports.
Heading into the print, CVS Health (CVS - Free Report) carries an Earnings ESP Score of -0.1%.
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CVS Health Q2 Preview: Can the Earnings Streak Continue?
The Zacks Retail – Pharmacies and Drug Stores Industry has held up relatively well year-to-date, declining 10.7% in value vs. the S&P 500’s decline of roughly 12.5%. The industry is currently ranked in the bottom 30% of all Zacks Industries.
A widely-recognized name in the industry is CVS Health (CVS - Free Report) . CVS Health is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care. In addition, the company is slated to release 2022 Q2 results before the opening bell on Wednesday, August 3rd.
Currently, the company is a Zacks Rank #3 (Hold) with an overall VGM Score of an A. Let’s take a closer look at how things stack up for the pharmacy giant heading into the print.
Share Performance & Valuation
Year-to-date, CVS shares have been highly defensive in nature, declining just 5.4% and easily outperforming the general market.
Image Source: Zacks Investment Research
Upon widening the timeframe to encompass the last year of share performance, we can see that CVS shares have been more robust than the general market for some time now, increasing nearly 20% in value.
Image Source: Zacks Investment Research
The positive price action of CVS shares relative to the S&P 500 is undoubtedly a positive, indicating that investors have defended the stock at a high level.
In addition, CVS shares could be undervalued, further bolstered by its Style Score of an A for Value. Its current forward earnings multiple sits enticingly at 11.5X, just above its five-year median of 10.2X and reflecting an attractive 39% discount relative to the S&P 500.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have primarily been bullish for the quarter to be reported, with two of the three estimate revisions being upwards over the last 60 days. The Zacks Consensus EPS Estimate resides at $2.16, penciling in a 10% decrease in quarterly earnings year-over-year.
Image Source: Zacks Investment Research
However, the top-line is in much better shape. CVS is projected to rake in a mighty $76.6 billion for the quarter, a solid 5.5% uptick compared to year-ago quarterly sales of $72.6 billion.
Quarterly Performance & Market Reactions
Bottom-line beats are the name of the game for CVS; the company hasn’t reported quarterly EPS below the Zacks Consensus EPS Estimate since 2015. Just in its latest quarter, CVS recorded a solid 6.4% EPS beat.
Top-line results have been just as stellar – CVS has chained together 16 consecutive top-line beats dating back to 2018. Below is a chart of the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
The market has had mixed reactions following the company’s quarterly reports as of late, with shares moving downwards three times and upwards three times over its last six bottom-line beats.
Putting Everything Together
CVS shares have been much stronger than the general market year-to-date and over the last year. In addition, the company sports attractive valuation levels.
Earnings are forecasted to dip by double-digits, but the top-line looks to grow modestly – a reflection of margin compression.
The company has repeatedly reported top and bottom-line results above expectations, but as of late, the market has had mixed reactions following the quarterly reports.
Heading into the print, CVS Health (CVS - Free Report) carries an Earnings ESP Score of -0.1%.