CVS Health Earnings Fall Short, Analysts Adjust Forecasts

CVS Health Corporation (NYSE: CVS) recently announced its third-quarter financial results, revealing earnings of $0.07 per share, significantly below analyst predictions. Despite this, the company’s revenue reached $95 billion, slightly surpassing expectations. Analysts have now adjusted their forecasts in light of these results.

The consensus among 23 analysts for CVS Health predicts revenues of $385.9 billion by 2025, marking a 5.1% increase from the previous year. However, expected earnings per share (EPS) have been revised downwards to $5.70, a 43% increase from current earnings but lower than the previously anticipated $6.13.

Interestingly, the consensus price target for CVS Health remains unchanged at $69.62, indicating analysts do not foresee the earnings decline significantly impacting the company’s valuation. The most optimistic analyst values the stock at $93.00 per share, while the most pessimistic sees it at $60.00.

In comparison to its historical performance, CVS Health's projected revenue growth of 4.1% annually until 2025 is slower than its past five-year average of 8.4% per annum. This growth rate also lags behind the forecasted 6.7% annual growth for other companies in the same industry.

Overall, the downgrading of EPS estimates reflects a decline in sentiment among analysts following the latest earnings report. Nonetheless, revenue estimates remain consistent with previous expectations, suggesting stability in that aspect. Despite CVS Health's slower growth compared to the industry, the price target consensus has not shifted.

While the immediate outlook for CVS Health shows a mixed picture, the long-term projections remain crucial, with estimates extending to 2026. Investors should also be aware of potential risks, as highlighted by analysts, which include three warning signs for CVS Health.