Yahoo Finanza Shares of Insurer CVS Health Fall on Mixed Guidance
CVS Health shares fell over 2% in pre-market trading on Wednesday after the drugstore chain and health insurer provided mixed guidance for the full year, despite beating earnings and revenue estimates in the fourth quarter.
The Woonsocket, Rhode Island-based insurer reported quarterly adjusted earnings of $1.98 per share, beating the market expectations of $1.93 per share. The insurer’s revenue jumped over 10% $76.60 billion from a year ago. That too beat the Wall Street consensus estimates of $75.67 billion.
That was largely driven by strong demand for COVID-19 tests and vaccinations related to the Omicron variant. Administered more than 8 million COVID-19 tests and more than 20 million COVID-19 vaccines nationwide in the fourth quarter of 2021.
For the full year, the company administered more than 32 million COVID-19 tests and more than 59 million COVID-19 vaccines, while maintaining a strong commitment to vaccine and testing equity by optimizing site locations and targeting outreach initiatives to reach vulnerable populations.
The insurer reaffirmed its adjusted earnings per share guidance range of $8.10 to $8.30, versus the market expectations of $8.27; however, it revised down its cash flow outlook to $12.0 billion to $13.0 billion from $12.5 billion to $13.0 billion.
CVS Health stock fell over 2% to $108.35 in pre-market trading on Wednesday. The stock rose over 7% so far this year after surging more than 50% in 2021.
Analyst Comments
“CVS Health (CVS) reported adj. EPS of $1.98, ahead of consensus of $1.83 and $1.90-$1.95 implied by 2021 guidance. The beat was driven by strong results in Retail/LTC. 2022 guidance of$8.10-$8.30 was reaffirmed. On the call, we look for more details on the pace of COVID vaccinations, which could present upside to guidance, and the update on the primary carestrategy,” noted Charles Rhyee, equity analyst at Cowen.
CVS Health Stock Price Forecast
Eighteen analysts who offered stock ratings for CVS Health in the last three months forecast the average price in 12 months of $115.76 with a high forecast of $125.00 and a low forecast of $106.00.
The average price target represents a 4.45% change from the last price of $110.83. Of those 18 analysts, 15 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price to $125 with a high of $219 under a bull scenario and $64 under the worst-case scenario. The investment bank gave an “Overweight” rating on the drugstore chain and health insurer’s stock.
“Combination with Aetna creates a fully integrated healthcare delivery channel, positioning CVS Health (CVS) as a premier player in the transformation of US healthcare. We envision CVS as having a pivotal role in reshaping access to health care by leveraging on existing real estate to create local healthcare hubs, leading to additional synergies,” noted Ricky Goldwasser, equity analyst at Morgan Stanley.
“Combination with Aetna provides a path for CVS to return to 10% earnings growth over time from alignments of Aetna membership and cost synergies.”
Several analysts have also updated their stock outlook. Jefferies raised the target price to $120 from $115. Bernstein lifted the target price to $116 from $111. Truist Securities upped the target price to $124 from $118. Evercore ISI increased the target price to $120 from $115.
Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator giving a strong buying opportunity.
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This article was originally posted on FX Empire
