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CVS Caremark Third Quarter Earnings Preview
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When CVS Caremark (NYSE:CVS) releases its third quarter earnings on Tuesday, November 6, 2012, it is expected to report earnings that are up 20% from a year ago. The consensus estimate is 84 cents per share, up from earnings of 70 cents per share a year ago.
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Everything Investors Need To Know About Earnings
What to Expect: Though it hasn't changed in the last month, the consensus estimate is up from 83 cents three months ago. Analysts are expecting earnings of $3.35 per share for the fiscal year.
Revenue is expected to exceed last year's figure of $26.67 billion by 16.2% and come in at $31 billion for the quarter. For the fiscal year, expected revenue is $123.01 billion.
Company Performance: Revenue increases have been in the double digits for the past four quarters. It has risen by an average of 15.1%, with the biggest increase of 19% coming in the first quarter.
CVS' P/E ratio of 16.6 is above the industry average of 1.72. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Understanding The P/E Ratio
Over the past quarter, the stock price has increased from $44.75 on August 3, 2012 to $46.40. CVS' worst recent stretch was when its stock price fell $1.79 per share between October 5, 2012 and October 15, 2012.
The Competition: CVS Caremark provides prescriptions and related health care services and products. Analysts are optimistic about CVS, with 17 of 19 assigning it a buy rating. They have grown pessimistic about the stock, as the number of buy ratings has dropped slightly over the past three months.
The company's closest competitor in the retail (drugs) industry is Walgreen (WAG). Analysts are more optimistic about CVS than about Walgreen. Only eight out of 19 analysts rate the latter a buy.
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Everything Investors Need To Know About Earnings
What to Expect: Though it hasn't changed in the last month, the consensus estimate is up from 83 cents three months ago. Analysts are expecting earnings of $3.35 per share for the fiscal year.
Revenue is expected to exceed last year's figure of $26.67 billion by 16.2% and come in at $31 billion for the quarter. For the fiscal year, expected revenue is $123.01 billion.
Company Performance: Revenue increases have been in the double digits for the past four quarters. It has risen by an average of 15.1%, with the biggest increase of 19% coming in the first quarter.
Over the past quarter, the stock price has increased from $44.75 on August 3, 2012 to $46.40. CVS' worst recent stretch was when its stock price fell $1.79 per share between October 5, 2012 and October 15, 2012.
The Competition: CVS Caremark provides prescriptions and related health care services and products. Analysts are optimistic about CVS, with 17 of 19 assigning it a buy rating. They have grown pessimistic about the stock, as the number of buy ratings has dropped slightly over the past three months.
The company's closest competitor in the retail (drugs) industry is Walgreen (WAG). Analysts are more optimistic about CVS than about Walgreen. Only eight out of 19 analysts rate the latter a buy.
by
Investopedia Staff
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