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CVS Health Stock Pops Before Q4 Earnings: What to Expect

Benjamin Rains

CVS Health CVS shares jumped 0.50% during regular trading hours Tuesday in continuation of a strong month for the pharmacy firm. So, let’s see what to expect from CVS’ fourth-quarter financial results that are due out before the opening bell Wednesday.

Overview

CVS completed its nearly $70 billion acquisition of Aetna in November 2018. The new firm could end up playing a bigger role in a health care environment that seems likely to feature more virtual medical checkups and hyper-localized care. CVS’ purchase also helps expand its reach as Amazon AMZN and others venture into the pharmaceutical business.

Any post-earnings momentum from CVS will come as welcome news to investors because we can see that the stock has dramatically underperformed the market over the last three years. CVS stock has also lagged Walgreens Boots Alliance WBA but topped Rite Aid RAD.

Outlook

Our current Zacks Consensus Estimate calls for CVS’ Q4 revenues to reach $53.71 billion. This would represent an 11% jump from the prior-year quarter and easily beat Q3’s 2.4% top-line expansion and Q4 2017’s 5.3% growth. Meanwhile, CVS’ same-store retail sales are projected to jump 4.69% and pharmacy comps are expected to pop 6.41%, based on our NFM estimates. Investors should note that both of these would mark a downturn from the third quarter.

Moving on, CVS is projected to see its adjusted quarterly earnings pop 7.81% to hit $2.07 per share. This would also mark a downturn from Q3’s 15.3% bottom-line expansion. Plus, CVS has seen its earnings estimate revision picture turn negative over the last 60 days for Q4 and coming periods.

CVS is scheduled to release its Q4 2018 financial results before the market opens on Wednesday. So make sure to come back to Zacks for a full break down of CVS’ actual metrics after fellow giant Walmart WMT reported stronger-than-expected fourth quarter financial results Tuesday.

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