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Key Takeaways
- CVS Health is scheduled to report earnings Wednesday morning after two disappointing quarters to start 2024.
- Shares have fallen roughly 30% since the start of 2024, but analysts largely believe CVS will be able to recover some of its stock losses going forward.
- Last month, the pharmacy chain and health-care provider faced reports that it was considering breaking up its business and installed a new CEO.
CVS Health (CVS) will report third-quarter earnings before the market opens Wednesday after the pharmacy and health-care provider had a rocky October that included a CEO change and layoffs, among other cost-cutting moves.
Despite its roughly 30% drop since the start of the year, the 13 analysts tracked by Visible Alpha remain largely bullish on CVS stock, with nine “buy” ratings and four “hold” ratings. However, the average target price of $68.69 implies that analysts expect CVS to recover some—but not all—of its losses since the start of 2024. The stock closed Monday at $54.65, down 2%.
Revenue is projected to rise to $93.02 billion for the quarter, a bump of about 3.6% year-over-year. But net income is expected to fall by more than 40% to $1.29 billion, or $1.05 per share, according to estimates compiled by Visible Alpha.
Earnings Follow CEO Swap, Reports of Potential Breakup
CVS reports its latest earnings following a turbulent October, which started with reports that a breakup of its namesake pharmacies and Aetna health insurance provider was being considered after its earnings in the first two quarters of 2024 disappointed and it repeatedly cut profit projections.
Weeks after it was reported that the company met with hedge fund Glenview Capital Management to discuss potential changes to its operations, CVS on Oct. 18 said company veteran David Joyner would take over as chief executive officer (CEO). The company at that time also released preliminary third-quarter earnings per share (EPS) projections of 3 cents to 8 cents and said it would provide new full-year guidance on Wednesday’s earnings call.
CVS shares have fallen 19% since mid-October.