Yahoo Finance CVS Health Corporation Just Missed Earnings - But Analysts Have Updated Their Models
There's been a notable change in appetite for CVS Health Corporation (NYSE:CVS) shares in the week since its quarterly report, with the stock down 18% to US$55.15. It looks like a pretty bad result, all things considered. Although revenues of US$88b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 33% to hit US$0.88 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CVS Health after the latest results.
See our latest analysis for CVS Health
Following the latest results, CVS Health's 24 analysts are now forecasting revenues of US$369.2b in 2024. This would be a credible 2.7% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$5.91, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$370.8b and earnings per share (EPS) of US$6.87 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The average price target fell 15% to US$74.93, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values CVS Health at US$101 per share, while the most bearish prices it at US$60.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that CVS Health's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2024 being well below the historical 9.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that CVS Health is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CVS Health. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that CVS Health's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for CVS Health going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - CVS Health has 2 warning signs (and 1 which is concerning) we think you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
