CVS Health Reports Earnings in Recovery Mode

Drug store giant CVS Health Corporation set its all-time intraday high of $113.65 at the end of July 2015 and has been generally slumping since then. The pharmacy stock declined under pressure from, Inc.’s plan to expand into the healthcare industry. CVS stock has been making a comeback since then, although it traded as low as $60.14 on March 27 as the company became aggressive with its takeover bid of health insurer Aetna Inc.

CVS shares closed Monday at $69.83, down 3.7% year to date and in correction territory at 16.8% below the Jan. 29 high of $83.88. More importantly, the stock is 16.1% above its March 27 low of $60.14.

Analysts expect CVS to deliver earnings per share of $1.40 when the company reports results before the opening bell on Wednesday, May 2. Some say that CVS paid too much for Aetna, which reported earnings before the markets opened on May 1. The insurance provider beat estimates and moved up about 1% in pre-market trading. Keep in mind that shareholders of Aetna approved the acquisition, but it still needs government approval. If approved, the deal will likely close in the second half of the year. Looking at CVS, the stock is too cheap to ignore, with a P/E ratio of just 10.81 and a dividend yield of 2.86%. (See also: Pharmacy Stocks Rise on News Amazon Is Backing Off.)

Drug store chain CVS Health Corporation is too cheap to ignore, with a P/E ratio of just 10.81 and a dividend yield of 2.86%. …read more

Read more here: CVS Health Reports Earnings in Recovery Mode

Category: CVS, AMZN, AET

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