CVS Health Posts Better-Than-Expected 4Q Results; Shares Gain Pre-Market

CVS Health reported better-than-expected 4Q results driven by growth in prescription volume and medical membership in the healthcare company’s government products. Shares rose almost 2% in Tuesday’s pre-market trading.

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CVS Health’s (CVS) 4Q adjusted earnings dropped 24.9% to $1.30 per share on a year-over-year basis but beat Street estimates of $1.24 per share. Revenues increased 4% to $69.6 billion and surpassed the consensus mark of $68.73 billion.

The company’s prescriptions filled came in at $376.3 million, up 2% year-over-year.

For 2021, the company projects adjusted EPS to be in a range of $7.39 to $7.55 per share. Cash flow from operations is anticipated to be in the range of $12 billion to $12.5 billion. (See CVS Health stock analysis on TipRanks)

CVS Health CEO Karen S. Lynch commented, “Our goal is to make health care more accessible, more affordable and simpler. In order to do this, we will accelerate the pace of our progress through targeted investments in key areas that will drive our consumer-focused strategy.”

On Feb. 8, Merrill Lynch analyst Michael Cherny increased the stock’s price target to $90 (21.3% upside potential) from $83 and reiterated a Buy rating. The analyst believes that, “a glide path for improved underlying growth is still in place, even with some of the near-term market choppiness.”

The consensus rating among analysts is a Strong Buy based on 7 Buys and 2 Holds. The average analyst price target stands at $86.38 and implies upside potential of about 16.4% to current levels over the next 12 months. Shares increased nearly 15.5% over the past six months.

Based on 8 unique factors, CVS Health scores a “Perfect 10” Smart Score, which implies that the stock is expected to outperform the market moving forward.