Shares of CVS Health CVS surged over 4% through mid-afternoon trading Wednesday on the back of a bullish call from Bernstein analysts. The drugstore chain is also coming off a stronger-than-expected fourth quarter. So, is now the time to buy CVS stock?
Bernstein analyst Lance Wilkes initiated coverage of CVS with an “outperform” rating and a $76 a share price target. This represents 41% upside to CVS’ closing price on Tuesday of $54.65 a share. The analyst thinks that the CVS-Aetna partnership is likely to be a long-term winner in healthcare.
Bernstein was also positive based on the company’s current valuation and its earnings growth prospects, among other reasons. “We believe the current price doesn't reflect Aetna's solid MCO business and the LT value of a care delivery strategy at retail,” Wilkes wrote in a note to clients.
“We think the current valuation already reflects potential shock to PBM margins and future deterioration in the retail business..."
CVS completed its nearly $70 billion acquisition of Aetna in November 2018. The new firm could end up becoming a larger player in a healthcare 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 deeper into the pharmaceutical business.
The company also saw its fourth-quarter fiscal 2018 revenue surge 12.5% to $54.4 billion, which topped our $53.71 billion Zacks Consensus Estimate. Meanwhile, at the bottom end of the income statement, CVS’ adjusted quarterly earnings came in at $2.14 a share to beat our estimate that called for $2.07 per share.
However, we can see that shares of CVS have not performed well over the last few years. In fact, CVS stock is down 22% over the last five years and 44% in the past three. Still, the company has outperformed its peer group, which includes Walgreens Boots Alliance WBA and Rite Aid RAD.
Outlook & Earnings Trends
Looking ahead, our Zacks Consensus Estimate calls for CVS’ first quarter fiscal 2019 revenue to surge roughly 32% to hit $60.31 billion. And the company’s full-year 2019 revenue is expected to jump over 29% to reach $250.63 billion.
Clearly, the firm’s top-line is set to be positively impacted by its Aetna acquisition. With that said, peeking ahead to harder-to-compare fiscal 2020, CVS’ full-year revenue is projected to climb just 3.81% higher than our 2019 projection to reach $260.17 billion.
Moving on, the company’s adjusted Q1 earnings estimate is projected to jump 3.38% to $1.53 per share, with CVS’ full-year earnings estimate expected to sink by roughly 3%. Looking further down the road, the company’s adjusted fiscal 2020 earnings are projected to surge 8.5% above our current-year estimate.
Still, investors should also note that the company’s earnings estimate revision trends have moved almost completely in the wrong direction recently. The charts below detail just how quickly CVS’ bottom-line estimates have deteriorated in the past 30 days.
CVS is a Zacks Rank #5 (Strong Sell) at the moment, based in large part on its earnings estimate revision activity. Therefore, despite Bernstein’s positivity, it seems like CVS might simply be a stock to keep an eye on for now.
在伯恩斯坦( Bernstein )分析师的乐观预期推动下， CVS Health CVS 的股价在周三午后交易中飙升逾4%。连锁药店第四季度的表现也好于预期。那么，现在是时候买 CVS 股票了吗？
伯恩斯坦( Bernstein )分析师兰斯•威尔克斯( Lance Wilkes )以“好于大盘”的评级和每股76美元的目标启动了对 CVS 的报道。这比 CVS 周二每股54.65美元的收盘价高出41%。分析人士认为 CVS-Aetna 合作伙伴关系很可能成为医疗行业的长期赢家。
伯恩斯坦基于该公司目前的估值和盈利增长前景等原因也表现积极。“我们认为，目前的价格没有反映出安泰稳健的 MCO 业务和零售护理交付战略的长期价值，”威尔克斯在给客户的一份报告中写道。
“我们认为，目前的估值已经反映出 PBM 利润率的潜在冲击，以及零售业务的未来恶化。。。”
CVS 于2018年11月完成了对 Aetna 近700亿美元的收购。这家新公司最终可能会成为医疗保健环境中的一个更大的参与者，该环境似乎有可能提供更多的虚拟医疗检查和超本地化的医疗服务。随着亚马逊( Amazon AMZN )和其他公司更深入地涉足制药业务， CVS 的收购也有助于扩大其覆盖面。
该公司2018年第四季度的收入也增长了12.5%，达到544亿美元，超过了我们53.71亿美元的 Zacks 共识估计。与此同时，在利润报告的底端， CVS 调整后的季度收益为每股2.14美元，超出了我们的预期，即每股2.07美元。
然而，我们可以看到，在过去几年中 CVS 的股票表现不佳。事实上， CVS 股票在过去五年下跌了22%，在过去三年下跌了44%。尽管如此，该公司的表现还是好于其同行，包括 Walgreens Boots Alliance WBA 和 Rite Aid RAD 。
展望未来，我们的 Zacks 共识估计要求 CVS 2019年第一季度财政收入增长约32%，达到603.1亿美元。预计该公司2019年全年收入将增长29%，达到2,506.3亿美元。
显然，该公司的收入将受到收购安泰的积极影响。话虽如此，展望2020财年， CVS 的全年收入预计将仅增长3.81%，高于2019年预期的2,601.7亿美元。
此外，该公司经调整后的第一季度收益预期将增长3.38%，至每股1.53美元， CVS 的全年收益预期将下降约3%。展望未来，该公司经调整的2020财年收益预计将比我们今年的预期高出8.5%。
不过，投资者也应该注意到，该公司最近的盈利预期修正趋势几乎完全朝着错误的方向发展。下面的图表详细说明了 CVS 的盈利预测在过去30天里恶化的速度。
CVS 目前是 Zacks 排名第五（强劲卖出）的公司，很大程度上是基于其盈利预测修正活动。因此，尽管伯恩斯坦是积极的，但 CVS 现在似乎只是一只关注的股票。