CVS shares gain the most in six months on Wednesday, first-quarter earnings top estimates, full-year profit forecast revised up

May 2, 2019 7:50 am

CVS Health Corp’s first-quarter earnings, reported on Wednesday, surged past Wall Street estimates, as the company drew benefits from its $69 billion acquisition of Aetna Inc. CVS Health also revised up its full-year forecast for adjusted earnings.

CVS shares closed higher for a fifth consecutive trading session in New York on Wednesday. It has also been the sharpest daily surge since November 6th 2018. The stock went up 5.42% ($2.95) to $57.33, after touching an intraday high at $57.75, or a price level not seen since March 4th ($58.55).

Shares of CVS Health Corp have retreated 12.50% so far in 2019 compared with a 16.63% gain for the benchmark index, S&P 500 (SPX).

In 2018, CVS Health’s stock went down 9.63%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

The drug store operator said its total revenue had surged 34.8% year-on-year to $61.65 billion during the first quarter.

Revenue at CVS Health’s pharmacy benefit management division went up 3.1% year-on-year to $33.56 billion during the latest quarter, as prices of brand name drugs rose.

Meanwhile, net income attributable to shareholders went up to $1.42 billion ($1.09 per share) during the first quarter from $998 million ($0.98 per share) in the year-ago period.

Earnings per share, which exclude special items, were reported at $1.62 during the first quarter, thus, exceeding the median analyst estimate of $1.50 per share.

CVS Health also said it now forecast full-year adjusted earnings within the range of $6.75 to $6.90 per share, up from a previously expected range of $6.68 to $6.88 per share.

According to CNN Money, the 24 analysts, offering 12-month forecasts regarding CVS Health Corp’s stock price, have a median target of $69.50, with a high estimate of $95.00 and a low estimate of $57.00. The median estimate represents a 21.23% upside compared to the closing price of $57.33 on May 1st.

The same media also reported that 19 out of 28 surveyed investment analysts had rated CVS Health Corp’s stock as “Buy”, while 8 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for CVS Health Corp (CVS) are presented as follows:

Central Pivot Point – $53.11
R1 – $54.11
R2 – $54.70
R3 – $55.70
R4 – $56.71

S1 – $52.52
S2 – $51.52
S3 – $50.93
S4 – $50.35

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