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Checking Up on CVS Health ahead of 3Q17 Earnings

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Checking Up on CVS Health ahead of 3Q17 Earnings PART 1 OF 4

Can CVS Health Beat Analyst Expectations in 3Q17?

CVS ready to post third-quarter results

The Rhode Island–based CVS Health (CVS) is slated to release its 3Q17 results on Monday, November 6.

The pharmacy giant is expected to report a 6.9% YoY (year-over-year) fall in earnings to $1.48 per share. Total sales are expected to land at $46.17 billion—3.5% more than the same quarter last year.

Can CVS Health Beat Analyst Expectations in 3Q17?

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CVS has outperformed Wall Street earnings expectations over the last six straight quarters. The company delivered better-than-top-line expectations in the first two quarters of 2017.

Valuations and recommendations summary

CVS Health is currently trading at a one-year forward earnings multiple of 11.4x, touching the lower end of the three-year average PE (price-to-earnings ratio) of 16.3x. Close competitor Walgreens Boots Alliance (WBA) also trades at a similar valuation of 11.7x.

About CVS Health

CVS Health is the United States’ largest pharmacy retail chain, operating 9,700 stores. Walgreens is the second-largest, and it operates around 8,100 stores in the United States.

However, CVS isn’t just a drugstore chain. It’s also one of the largest pharmacy benefits manager (PBM) in the country. It also operates 1,100 walk-in medical clinics and also owns a dedicated senior pharmacy care business.

With a market capitalization of $70.13 billion (as of October 30), CVS weight ~4% in the SPDR Consumer Staples Select Sector ETF (XLP).

What’s in this series?

In this series, we’ll find out what analysts are projecting for CVS Health’s third-quarter results. We’ll also do a quick recap of the company’s most recent earnings and briefly discuss its year-to-date stock market performance and Wall Street recommendations.

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