CVS Health is set to report its Q1 2024 results, with revenues expected to be around $90 billion, slightly above the consensus estimate. Earnings per share are projected to be approximately $1.74, slightly above the consensus estimate but lower than the prior-year quarter. The company’s stock performance has been volatile in recent years, with returns fluctuating. Despite underperforming the S&P 500 in 2023, CVS stock is currently considered undervalued. With a valuation of $88 per share, about 30% above its current price, CVS is trading at a lower P/E multiple compared to its historical average.
In the previous quarter, CVS Health saw a revenue increase of 12% year-over-year, with growth across all segments. The company’s adjusted operating margin declined slightly, attributed to higher medical benefit ratios. Despite a 4% rise in adjusted profit per share from the prior-year quarter, increased costs, particularly benefits costs, may have impacted the overall performance. For the latest quarter, CVS is expected to benefit from continued growth in healthcare and pharmacy services, driven by increased prescription volume and drug price inflation. Acquisitions made in the previous year are also expected to contribute to top-line expansion.
While there may be a decline in earnings for Q1 due to increased medical costs, CVS stock is seen as attractive for long-term gains. Peer comparisons show that CVS stock is undervalued, providing an opportunity for investors to potentially benefit from robust long-term growth. The uncertain macroeconomic environment, with factors such as high oil prices and elevated interest rates, may pose challenges for CVS. However, the company’s solid performance in previous quarters and potential for growth in healthcare and pharmacy services are positive indicators for future success.
Overall, CVS Health’s results for Q1 2024 are expected to show steady growth in revenues, driven by the company’s healthcare and pharmacy services businesses. Despite potential challenges such as increased costs, CVS stock is considered undervalued and offers an attractive opportunity for investors seeking long-term gains. With a valuation of $88 per share, above its current price, CVS has the potential for strong performance in the coming quarters. Investors may want to consider CVS stock for its growth potential and undervalued status.