CVS Health (CVS:NYE), one of the leading healthcare companies, is taking strategic steps to optimize its operations and bolster profitability. The Wall Street Journal reports that CVS is set to eliminate 5,000 corporate positions as part of its cost-cutting measures. Additionally, the company aims to trim down travel expenses and implement productivity-focused initiatives to fortify its margins. These developments come ahead of CVS’s scheduled announcement of its second-quarter earnings on Wednesday, August 2, 2023. Let’s delve deeper to see what analysts have to say about CVS Stock Forecast!
CVS Stock Forecast-Analysts’ Projections for Q2 Earnings:
Industry experts are keeping a close eye on CVS stock forecast as it prepares to unveil its Q2 financial results. According to Wall Street analysts, CVS is likely to report revenues of $86.41 billion for the second quarter, indicating growth from the prior-year quarter’s $80.64 billion. This projected increase in sales is expected to be driven by strong market performance across all of CVS’s businesses.
However, the optimistic sales outlook is tempered by expectations of a decline in earnings. Analysts estimate CVS’s second-quarter earnings per share (EPS) to be $2.13, down from $2.40 reported in the corresponding period of the previous year. The expected earnings decline can be attributed to decreased COVID-related contributions.
Analyst Ratings and Price Targets:
Despite the challenges faced by CVS, analysts remain cautiously optimistic about the CVS stock forecast. On July 14, Mizuho Securities analyst Ann Hynes adjusted the price target for CVS stock to $88, down from the previous $120. Hynes cited “multiple compression in retail pharmacy” as the reason for the revision. However, she maintained her Buy recommendation on the CVS stock.
Hynes is not the only analyst making adjustments ahead of CVS’s Q2 earnings announcement. TD Cowen analyst Charles Ryhee and JPMorgan analyst Lisa Gill have also lowered their price targets on CVS stock, reflecting the cautious sentiment prevailing in the market.
Investor Outlook and Stock Ratings:
With 13 Buy recommendations and four Hold recommendations, CVS stock currently holds a Strong Buy consensus analyst rating. The average price target for CVS stock, as indicated by analysts, stands at $100.21, suggesting a potential upside of 34.17% from its current levels.
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CVS Stock Forecast-Options Trading Signal:
Options traders are expecting an earnings-related move of approximately 4.35% for CVS, surpassing the previous quarter’s -3.69% move and the average 1.31% move observed over the last eight quarters. This heightened anticipation underscores the market’s keen interest in CVS’s Q2 earnings announcement.
Bottom Line:
CVS Health’s workforce reduction and cost-cutting efforts come at a crucial juncture for the company. As investors eagerly await its second-quarter results, the broader market sentiment remains cautiously optimistic about CVS’s prospects for sustainable growth and profitability.
