CVS Health Corporation (CVS) is scheduled to report fourth-quarter earnings results before the regular trading hours on Wednesday, February 20. The retail pharma company is expected to report an 11% jump in revenue to $53.71 billion, primarily due to higher network claim volumes in the Pharmacy services segment.
Separately, competitive pricing in a drug market that is seeing rapid inflation should also help CVS wade through the highly competitive retail pharma environment. Look out for what the management has to say on client retention rates during the quarter, as well as its expectations for the year.
Meanwhile, the retail segment is likely to see weakness due to industry headwinds, though some of this will be offset by the successful partnership it has formed with various pharmacy benefit managers. Analysts expect revenue from this segment to range around 15%.
Earnings for the quarter are projected to grow about 8% to $2.07 per share. This is much slower than the 15% jump it reported during the last-reported quarter.
CVS stock has tumbled 16% from its 52-week high of achieved in November. In the trailing 52-weeks period, the stock has declined 4%, compared to a 0.5% gain witnessed by the S&P 500 index.
CVS stock has an average 12-month price target of $89.15, suggesting a 30% upside from its last close. Ten out of 14 analysts covering the stock has a Buy rating, while the rest recommend Hold.
Last reported quarter
In Q3, CVS’ net revenues improved 2.4% to $47.3 billion, while GAAP diluted EPS from continuing operations was $1.36. Adjusted earnings were $1.73 a share. Shares jumped 2.59% following the announcement on the better-than-expected results.
As American fast-food giants post year-end earnings this time around, investors would be on the lookout for how fierce competition is affecting leading players such as Domino’s Pizza and McDonald’s.
One among the major players, Domino’s Pizza (DPZ), is expected to post its fourth-quarter 2018 earnings before the opening bell on Thursday, Feb. 21.
Despite a recent cut in estimates, the market expects the pizza chain to earn $2.65 per share on revenue of $1.09 billion. Recent reports of economic slowdown look to have affected the consensus.
In the previously reported third quarter, Domino’s exhibited a huge revenue jump. However, it failed to meet Market expectations then, and this triggered a stock sell-off shortly after the results announcement.
Net profit had then jumped nearly 50% year-over-year, surpassing analyst estimates on robust margin growth.
The period saw higher orders on more store count. Domestic same-store sales inched up 6.4%, while international comparable store sales grew 6.3%. In the third quarter, Domino’s Pizza added 232 new stores.
As the pizza giant reports earnings this week, expectations are riding high. Despite a slowing retail quarter, this is one sector that many believe will be absolved from the economic slowdown.
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