{"id":3120,"date":"2023-05-02T06:30:45","date_gmt":"2023-05-02T10:30:45","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/will-cvs-stock-rise-post-q1\/"},"modified":"2023-05-02T06:30:46","modified_gmt":"2023-05-02T10:30:46","slug":"will-cvs-stock-rise-post-q1","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=3120","title":{"rendered":"Will CVS Stock Rise Post Q1?"},"content":{"rendered":"<div>\n<p><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/CVS\/\">CVS Health (NYSE: CVS)<\/strong><strong> <\/strong>is scheduled to report its Q1 2023 results on Wednesday, May 3. We expect CVS stock to trade sideways post the results announcement, with Q1 revenue and earnings aligning with the consensus estimates. While we expect the company to post steady growth for its healthcare and pharmacy services businesses, higher costs likely weighed on its overall performance. Although we expect CVS to report an in-line Q1, CVS stock looks undervalued, as discussed below. Our interactive dashboard analysis on <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/CVS\/no-login-required\/ZzONXNNW\/CVS-Health-CVS-Earnings-Preview-CVS-Stock-Likely-To-Trade-Sideways-Due-To-FY-2023Q1-Revenues-As-Well-As-Earnings-Meeting-Expectations?fromforbesandarticle=trefis230502\">CVS Health\u2019s Earnings Preview<\/strong> has additional details.<\/p>\n<p><strong>(1) Revenue expected to trend higher in Q1<\/strong><\/p>\n<ul>\n<li>Trefis estimates CVS\u2019 Q1 2023 revenues to be around $80.8 billion, reflecting a mid-single-digit y-o-y growth, and it compares with the $80.9 billion consensus estimate.<\/li>\n<li>CVS should benefit from increased prescription volume and drug price inflation. Its healthcare segment should also see steady growth driven by a rise in total membership.<\/li>\n<li>Looking back at Q4 2022, CVS reported a 9% y-o-y rise in sales to $83.8 billion, led by higher retail, pharmacy services, and health care benefits revenue.<\/li>\n<li>Our dashboard on<strong> <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/CVS\/no-login-required\/MX1D0hKT\/CVS-Health-Revenues-How-Does-CVS-Make-Money-?fromforbesandarticle=trefis230502\">CVS Health\u2019s Revenues<\/strong><strong> <\/strong>offers more details on the company\u2019s segments.<\/li>\n<\/ul>\n<p><strong>(2) EPS likely to align with the consensus estimates<\/strong><\/p>\n<ul>\n<li>CVS\u2019 Q1 2023 adjusted earnings per share is expected to be $2.10 per Trefis analysis, aligning with the consensus estimate. This compares with the $2.22 figure the company reported in the prior-year quarter.<\/li>\n<li>CVS\u2019 adjusted net income of $2.6 billion in Q4 2022 reflected a 0.8% y-o-y decline, as higher revenue growth was offset by a 63 bps decline in operating margin to 4.8%. However, the medical cost ratio improved by 100 bps y-o-y.<\/li>\n<li>For the full-year 2023, we expect the adjusted EPS to be $8.83, compared to $8.70 in 2022.<\/li>\n<\/ul>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p><strong>(3) CVS stock is undervalued<\/strong><\/p>\n<ul>\n<li>We estimate <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/CVS\/no-login-required\/23k0rp3j\/CVS-Health-CVS-Valuation-Is-CVS-Stock-Expensive-Or-Cheap-?fromforbesandarticle=trefis230502\">CVS Health\u2019s Valuation<\/strong> to be $122, a significant 66% above the current market price of $73.<\/li>\n<li>At its current levels, CVS stock is trading at 8x its expected forward earnings of $8.83 on a per share and adjusted basis for full-year 2023, compared to the last two-year average of a little over 11x.<\/li>\n<li>Given its transformation from a retail pharmacy to a broader healthcare provider, we have assigned a slightly higher multiple for CVS (vs. its historical average). Its new acquisitions will further strengthen its business and help expand its net margins, resulting in robust earnings growth beyond 2024.<\/li>\n<\/ul>\n<p>While CVS stock looks undervalued, it is helpful to see how <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/CVS\/topic\/peer-comparisons\">CVS Health\u2019s Peers<\/strong> fare on metrics that matter. You will find other valuable comparisons for companies across industries at <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/topic\/peer-comparisons\">Peer Comparisons<\/strong><strong>.<\/strong><\/p>\n<p>Furthermore, the Covid-19 crisis and recent market volatility have created many pricing discontinuities which can offer attractive trading opportunities. For example, you\u2019ll be surprised how counter-intuitive the stock valuation is for<strong> <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/TGT\/no-login-required\/OW8SFweB\/Target-vs-Emergent-Biosolutions-TGT-stock-s-significantly-higher-valuation-vs-EBS-appears-counterintuitive?fromforbesandarticle=trefis230502\">Target vs. Emergent Biosolutions<\/strong>.<\/p>\n<p>What if you\u2019re looking for a more balanced portfolio instead? Our <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/THEMES\/no-login-required\/ixlFNWUX\/High-Quality-Portfolio-with-175-Return-Since-2016-vs-50-for-SPY-30-Limit-Version-?fromforbesandarticle=trefis230502\">high-quality portfolio<\/strong> and <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/M7MacZNG\/Multi-Strategy-Portfolio-262-Return-Since-2016-vs-102-for-S-P-500?fromforbesandarticle=trefis230502\">multi-strategy portfolio<\/strong> have beaten the market consistently since the end of 2016.<\/p>\n<p>Invest with <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/M7MacZNG?fromforbes\">Market Beating Portfolios<\/strong><\/p>\n<p>See all <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/price-estimates?fromforbes\">Price Estimates<\/strong><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/greatspeculations\/2023\/05\/02\/will-cvs-stock-rise-post-q1\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>CVS Health (NYSE: CVS) is scheduled to report its Q1 2023 results on Wednesday, May 3. We expect CVS stock to trade sideways post the results announcement, with Q1 revenue and earnings aligning with the consensus estimates. While we expect the company to post steady growth for its healthcare and pharmacy services businesses, higher costs [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-3120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Will CVS Stock Rise Post Q1? | iFintechWorld<\/title>\n<meta name=\"description\" content=\"CVS Health (NYSE: CVS) is scheduled to report its Q1 2023 results on Wednesday, May 3. 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