I. Recent CVS Health Stock Performance
CVS Stock Got A Downbeat Forecast
On May 1, CVS Health reported its latest earnings, precipitating a sharp decline in its stock price. The company's adjusted earnings per share (EPS) for the first quarter came in at $1.31, well below the analyst consensus of $1.69. CVS's significant reduction in its annual earnings guidance was more alarming to investors, slashing it from $8.30 per share to $7.00 per share.
This downward revision is primarily attributed to rising medical costs. As the world returns to normalcy post-COVID-19, previously deferred surgeries and medical procedures are resuming, driving up healthcare expenses. Last year, UnitedHealth Group and other insurers noted a similar trend, observing an increase in surgical procedures.
CVS's health insurance division, Aetna, is particularly impacted by this surge in medical activity. CEO Karen Lynch highlighted that the company faces "broad-based utilization pressure in our Medicare Advantage business in a few areas." This increased utilization and rising costs have prompted CVS to lower its earnings forecast, resulting in a sell-off of its stock.
CVS Health Lags S&P 500
CVS Health stock (NYSE: CVS) currently trades at $58 per share, marking a steep 47% decline from its pre-inflation peak of $110 in February 2022. In contrast, Walgreens stock has fallen by 75% during this period due to declining profitability. In early June 2022, before the Federal Reserve began raising interest rates, CVS stock was at $93. Since then, it has dropped by 37%, while the S&P 500 has risen by 45%.
The underperformance of CVS stock can be attributed to shrinking margins driven by rising medical costs. To return to its pre-inflation high of $110, CVS stock would need to gain 90%, which seems unlikely. Our in-depth analysis of CVS Health's potential upside post-inflation shock explores the company's stock trends during the tumultuous market conditions in 2022. It compares them to its performance during the 2008 recession.
CVS Health Seeks a Trend From Earnings Report
The investment community is keenly awaiting CVS Health's forthcoming earnings report. The company is projected to post an EPS of $1.77, reflecting a 19.91% decline from the same quarter last year, while revenue is expected to rise by 3.03% to $91.62 billion.
For the full year, analysts Estimate forecast earnings of $7.02 per share and revenue of $368.96 billion, indicating a 19.68% drop in earnings and a 3.12% increase in revenue compared to the previous year.
Notably, recent changes in analyst estimates for CVS Health often signal shifting business trends. Thus, upward revisions in these estimates can be seen as a positive sign for the company's future prospects.
Expert Insights on CVS Stock Forecast for 2024, 2025, 2030 and Beyond
CVS stock price has remained in a downtrend since 2022, floating above the support level of 55. Before checking on the details of CVS Stock Forecast for 2024, 2025, 2030, and Beyond, let's see what analysts think about CVS stock:
|
Providers |
2024 |
2025 |
2030 & beyond |
|
Coinpriceforecast |
$63.26 |
$76.63 |
$121.89 |
|
Coincodex |
$ 58.24 |
$ 59.90 |
$ 67.05 |
|
Stockscan |
$76.69 |
$57.30 |
$57.73 |
|
Coindataflow |
$766.86 |
$2063.31 |
$1921.04 |
II. CVS Stock Forecast 2024
After reaching the low of 52.77 in the last week of May, the price has been sideways in Q1 this year and slipped in Q2. By the end of the current year, the price may hit 64.69 resistance, and a possible breakout may lead the price to 83.31.
In the daily chart of CVS, the broader market outlook is bearish, as the downward pressure is visible since the beginning of 2023. Moreover, a buy-side liquidity sweep is seen in January 2024, which suggests a confluence of bearish factors. Overall, the ongoing bearish pressure needs to form a bottom before validating the trend reversal.
In the main price chart, the EMA 21 line crossed below the SMA 100 line when the price declined in May, declaring significant bearish pressure on the asset price. So, the price may reach the nearest support of 52.89, followed by the next support of 48.36.
Meanwhile, the price may exceed the EMA 20 line, indicating a primary sign of upcoming buying pressure. Concurrent bullish pressure will also trigger the price above the SMA 100 line. In that case, buying pressure with a stable momentum above the 64.69 event level might influence bulls to extend the market moment.
Based on the CVS Stock Forecast 2024, the significant bullish pressure can trigger the price toward the nearest resistance of 64.69, while a breakout of that level may lead the price toward the next resistance of 83.31 by the end of 2024.
A. Other CVS Stock Price Prediction 2024 Insights: Is CVS a good stock to buy?
According to a recent report from Tiprank, most analysts are long in this stock. According to the projection from 32 analysts, 13 analysts are long in July 2024, as opposed to holding 18 analysts. Overall, Analyst average CVS price target in the past 3 months is $67.11.
In another report from Simplywall.st, the consensus CVS price target has decreased by 15% to $74.93, as analysts have plainly linked the stock's performance to lower-than-anticipated earnings. Analyzing the range of analyst estimates can offer valuable information regarding the extent to which outlier opinions deviate from the average. The most optimistic analyst assigns a value of $101 per share to CVS Health, while the most pessimistic analyst positions it at $60.00.
B. Key Factors to Watch for CVS Stock Forecast 2024
CVS Earnings Forecast 2024
In the current forecast, CVS has maintained positive earnings per share until a 22.72% decline was seen in Q1 2024. For the coming quarter, investors should find a rebound in earnings reports, ensuring that the company is not falling apart.
For Q2 2024, the forecasted earnings per share is $1.76, which might be extended to $1.92 in Q4 2024. If the company produces an upbeat result, we may expect the stock price to increase.
CVS Health Cash Flow Position
In the cash flow position, CVS failed to show an optimistic cash flow position in recent years, where 2023's cash flow showed a 22% decrease. However, the downbeat cash flow position since 2019 could be an alarming sign for this stock. Currently, a positive cash and cash equivalent position could signal long-term business stability, creating a bullish opportunity.
CVS Health: Altman Z Score Analysis
Source: discoverci
As per the latest data, CVS Health Corp's Altman Z-score has decreased from 2.96 to 2.09 since December 31, 2009. The company's quarterly Altman Z-score ranged from 1.51 to 4.28. From 2009 to 2024, the average quarterly Altman Z-score was 2.82.
As per the latest reading, the score is below the industry average, indicating a potential insolvency risk.
CVS Stock Forecast 2024 - Bullish Factors
CVS provides key opportunities to invest depending on some key strengths, such as:
- The current dividend payout ratio is sustainable at 46.75%, and it is expected to drop to 34.28% next year, suggesting potential for continued or increased dividend payments.
- CVS Heals is expanding primary care and telehealth services to enhance customer engagement and loyalty, driving long-term growth.
- CVS's revenue projection is upbeat. According to current data, revenue is expected to increase to $372.45 billion in 2024 and $390.91 billion in 2025.
CVS Stock Price Prediction 2024 - Bearish Factors
CVS has some challenging factors to overcome, such as:
- Due to rising medical costs, CVS has revised its EPS estimate for 2024 from $8.50 to at least $8.30, signaling potential financial strain and reduced profitability expectations (Morpher).
- The company is under multiple investigations for potential securities law violations, contributing to market uncertainty and potential legal costs.
III. CVS Stock Forecast 2025
CVS stock price may seek appropriate support to bounce back toward 90.64 by the end of 2025.
On the weekly chart, the price bounced back from near the 53.00 level, confirming minor buyers' activities. However, the broader market trend is bearish as a potential Head and Shoulders breakout is visible from the 70.48 event level.
Looking at the RSI indicator window, the dynamic signal line bounces back from the oversold level, which could signal buying interest in the asset. Meanwhile, the SMA 100 line looks like a dynamic resistance, which could be the primary target of a possible bullish correction as a mean reversion. Any breakout above may trigger the price to reach 90.00 by the end of 2025.
However, ongoing selling pressure can trigger the price to decline toward the 52.07 support, which may break to open room for the price to reach the next support, near 45.05. In the bearish CVS Stock Forecast 2025, the dynamic 20-week EMA could be a potential near-term resistance. The downside momentum is potent as long as the current price remains below this crucial line.
A. Other CVS Stock Price Prediction 2025 Insights: Is CVS a buy?
Source: tradingview
Based on the forecast from TradingView, the next 1-year forecast to July 2025 suggests a 51% increase in the price to 87.00. Moreover, the average CVS stock price target is 67.31, while the minimum CVS target price is 59.00.
Source: wallstreetzen
Another report from Wallstreetzen suggests an upbeat price projection for CVS stock, aiming for the $94.00 level by the end of 2025. Moreover, the median CVS price target is set at 71.00, while the minimum target would be at 58.00.
B. Key Factors to Watch for CVS Stock Forecast 2025
CVS Key Ratio Analysis
Source: alphaspread
Among key CVS ratios, the Gross profit margin for the last ten years is 25%, while the net profit margin remains at 3%. Moreover, the Net Profit Margin shows an excessive fluctuation, suggesting a volatility in the stock price. In that case, the CVS Stock Forecast 2025 might need more attention beyond the earnings growth before going long.
CVS Competitive Factor
Source: wallstreetzen
As per the report from Wallstreetzen, the earnings growth for CVS Health could increase by 15% by the end of 2027, which is lower than the industry average of 26.21%.
Revenue could also increase by 4.6%, which is below the industry average of 6.03%. This report also provided opinions from top analysts where analysts from Bank of America and Goldman Sachs maintained the strong buy position, while analysts from Barclays and UBS remained on Hold.
CVS Stock Forecast 2025 - Bullish Factors
- CVS Health's revenue is projected to reach approximately $390.91 billion by 2025, with EPS expected to raise significantly to $7.93 in 2024 and consecutively increase in 2025.
- Key efforts include revamping retail pharmacy pricing and enhancing Aetna's Medicare Advantage star ratings, which are anticipated to strengthen market position and improve financial performance.
- CVS Health's integration of retail pharmacy, health insurance and pharmacy benefit management allows it to capitalize on healthcare industry trends and leverage synergies for sustained growth.
CVS Stock Price Prediction 2025 - Bearish Factors
There are some challenging factors for the company to overcome to gain ultimate success, such as:
- Along with Walgreens and Rite Aid, CVS is reducing the number of physical locations, reflecting market challenges and a shift towards online pharmacies, which could potentially impact retail revenue.
- The economic environment could be challenging for CVS. For example, inflationary pressures and potential changes in healthcare policy could adversely affect it. Economic uncertainty impacts consumer spending and healthcare utilization, influencing sales and profitability.
- Adjustments in Medicare reimbursement rates and other healthcare regulations pose risks to the financial performance of CVS company.
IV. CVS Stock Forecast 2030 and Beyond
The monthly chart shows that CVS stock price has declined from its peak of nearly 110 and seeks to reach a possible trend line, suggesting an uptrend near the 52 area, which can trigger the price to bounce back toward 121 by the end of 2030.
In the monthly chart of CVS, the buying pressure during the pandemic failed to make a significant high, as the 2024's high is still protected. As a result, the price moved below crucial dynamic lines without grabbing sufficient buy-side liquidity. As the ongoing price action is bearish, there is a downside risk if the price breaks below the trendline; it may reach the next support level near 31.19 as the EMA 20 line falls below the SMA 100 line, declaring a possible downtrend continuation.
Meanwhile, the RSI signal line declined from the midline, supporting the recent bearish movement. If the bearish crossover between EMA 21 and SMA 100 isn't sustained and the EMA 20 line gets back above the SMA 100 line again, it will declare significant bullish pressure to trigger the price to hit the resistance area of $110. A breakout above that level would leave optimism that the price may hit the expected $121 by 2030. Then, the RSI signal line will also edge to the upper line.
A. Other CVS Stock Price Prediction 2030 and Beyond Insights: CVS stock buy or sell?
Source: wallstreetzen
According to the report from Wallstreetzen, CVS revenue has a higher possibility of keep rising, maintaining the average $415.1B in the next three years. Moreover, the next two years' forecast shows $$389.1B average revenue per year, which suggests a positive outlook for the stock.
Although this report did not provide any stock forecast, the EPS forecast for the next three years was $8.78, 53% higher than the current rate.
Source: allmarketanalysis
Another report from all market analysis suggests that the CVS stock has a double-top formation at this price point. If the price of CVS stock surpasses $108.56, it may indicate an upward trend. Alternatively, the stock may continue to fluctuate sideways or downward at the 14.58 level.
B. Key Factors to Watch for CVS Stock Prediction 2030 and Beyond
CVS Revenue Forecast
CVS maintained an upward traction in revenue since 2016, increasing the revenue from $177.53 billion in 2016 to $357.78 billion in 2023. Moreover, the current forecasted full year revenue for 2027 is $433.61 billion, which is higher than the latest actual revenue.
Healthcare Sector Market Cap
The consumer healthcare sector's projection is upbeat. It is maintaining a growth rate of 7.43% CAGR. Moreover, China is likely to become a market leader in this sector.
Considering the upward curve in the industry, the market is likely to expand, creating room for further revenue generation from CVS Health. Moreover, if the company can avoid higher material costs by sourcing from China, we may expect a bull run in the stock price.
CVS Stock Price Prediction 2030 and Beyond - Bullish Factors
Some positive factors can affect the CVS stock price, such as:
- CVS's strategy of expanding healthcare services and acquiring related businesses, like Aetna in 2018, is a significant bullish factor expected to drive long-term growth by creating a more integrated healthcare model that reduces costs and improves patient outcomes.
- CVS is heavily investing in digital health solutions, including telehealth services and digital pharmacy tools, to meet the growing demand for convenient and accessible healthcare, enhance customer experience, and drive revenue growth.
- Consistent revenue growth and solid earnings provide an enhanced foundation for future stock price appreciation. Significant cash flow generation enables continued investment in growth initiatives and shareholder returns, such as share buybacks and dividends, further boosting investor confidence.
CVS Stock Prediction 2030 and Beyond - Bearish Factors
- The vast scale of CVS Health's operations involves intricate logistics and the integration of various business segments. Any disruptions or inefficiencies can lead to increased costs and diminished profitability. Challenges in integrating acquisitions like Aetna further complicate the company's operations and financial outcomes.
- CVS faces ongoing risks from regulatory and legal challenges. Frequent changes in U.S. healthcare regulations can impact profitability and the company's operations. Additionally, multiple lawsuits related to business practices can damage the company's reputation and lead to significant financial penalties, potentially hindering long-term growth.
V. Conclusion
A. CVS Stock Outlook: Is CVS stock a buy?
The earnings data makes investors optimistic about investing in the CVS stock with the expectation of a significant return. Moreover, the higher consumer demand and upbeat analyst projections could make this stock more attractive to investors. Although a corrective price action is seen in 2024 due to higher production cost, a rebound could resume taking the price at the pre-pandemic high by the end of 2030.
The recent progress of cash flow, revenue growth, and other key data supports the optimism about the CVS stock price, which may post significant gains in the upcoming months.
However, investors should consider comprehensive pressure and market volatility when choosing a stock for a specific period. In that case, investing through Contracts for Difference (CFDs) could be an attractive option for investors with a certain understanding of potential stock trading.
B. Trade CVS Stock CFD with VSTAR
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FAQs
1. Is CVS stock a good buy right now?
Analysts many consider CVS a buy due to its low valuation and growth potential.
2. What is the target price for CVS?
The average target price for CVS stock is around $75.05, with estimates ranging from $58 to $100.
3. What is the stock price prediction for CVS in 2025?
CVS stock price is expected to reach $90.64 by the end of 2025.
4. Where will CVS stock be in 5 years?
In five years, CVS stock could be significantly higher, potentially reaching around $120.
