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Will CVS Earnings Miss this Quarter?

by Mark Vickery

April 30, 2013 | Comments : 0 Recommended this article: (0)

HSIC CVS WAG

CVS Caremark ( CVS - Analyst Report ) is scheduled to report its first-quarter 2013 results before the opening bell on May 1. In the last quarter, CVS Caremark reported a 2.73% positive earnings surprise on the heels of robust growth across both operating platforms. Let us see how things are shaping up for this integrated pharmacy services provider prior to the announcement.

Factors to Consider this Past Quarter

CVS Caremark’s bright prospects for 2013 on the heels of solid earnings forecast, stronger balance sheet, favorable selling season and positive industry dynamics are encouraging. On the domestic front, demographic trends, healthcare reforms in the U.S., and the generic wave in the pharmaceutical industry are expected to catalyze growth for the company. In light of these trends, CVS Caremark expects accelerating adoption of its programs such as Maintenance Choice, Pharmacy Advisor and ExtraCare loyalty program, along with expansion of its MinuteClinics.

As per management, the company continues to win market share in retail pharmacy. In the meantime, the tussle with Walgreens ( WAG - Analyst Report ) to gain market share has intensified. Macroeconomic uncertainty is another looming concern.

Earnings Whispers?

Our proven model does not conclusively show that CVS Caremark is likely to beat earnings estimate this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks Earnings ESP: The Most Accurate estimate stands at 78 cents, while the Zacks Consensus Estimate is pegged at 79 cents. This comes to a difference of -1.27%.

Zacks Rank #2 (Buy): CVS Caremark’s Zacks Rank #2 diffuses the predictive power of ESP. The Zacks Rank #2 together with -1.27% earnings ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies from the healthcare sector you may want to consider as our model shows they have the right ingredients to post an earnings beat this quarter:

Coventry Health Care Inc. ( ) , Earnings ESP of +5.06% and Zacks Rank #2 (Buy)

Henry Schein ( HSIC - Snapshot Report ) , Earnings ESP of +3.74% and Zacks Rank #3 (Hold)CVS Caremark ( CVS - Analyst Report ) is scheduled to report its first-quarter 2013 results before the opening bell on May 1. In the last quarter, CVS Caremark reported a 2.73% positive earnings surprise on the heels of robust growth across both operating platforms. Let us see how things are shaping up for this integrated pharmacy services provider prior to the announcement.

CVS Caremark ( CVS - Analyst Report ) is scheduled to report its first-quarter 2013 results before the opening bell on May 1. In the last quarter, CVS Caremark reported a 2.73% positive earnings surprise on the heels of robust growth across both operating platforms. Let us see how things are shaping up for this integrated pharmacy services provider prior to the announcement.

Factors to Consider this Past Quarter

CVS Caremark’s bright prospects for 2013 on the heels of solid earnings forecast, stronger balance sheet, favorable selling season and positive industry dynamics are encouraging. On the domestic front, demographic trends, healthcare reforms in the U.S., and the generic wave in the pharmaceutical industry are expected to catalyze growth for the company. In light of these trends, CVS Caremark expects accelerating adoption of its programs such as Maintenance Choice, Pharmacy Advisor and ExtraCare loyalty program, along with expansion of its MinuteClinics.

As per management, the company continues to win market share in retail pharmacy. In the meantime, the tussle with Walgreens ( WAG - Analyst Report ) to gain market share has intensified. Macroeconomic uncertainty is another looming concern.

Earnings Whispers?

Our proven model does not conclusively show that CVS Caremark is likely to beat earnings estimate this quarter. That is because a stock needs to have both a positive Earnings ESP(Read: Zacks Earnings ESP: A Better Method)and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks Earnings ESP: The Most Accurate estimate stands at 78 cents, while the Zacks Consensus Estimate is pegged at 79 cents. This comes to a difference of -1.27%.

Zacks Rank #2 (Buy): CVS Caremark’s Zacks Rank #2 diffuses the predictive power of ESP. The Zacks Rank #2 together with -1.27% earnings ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies from the healthcare sector you may want to consider as our model shows they have the right ingredients to post an earnings beat this quarter:

Coventry Health Care Inc. ( ) , Earnings ESP of +5.06% and Zacks Rank #2 (Buy)

Henry Schein ( HSIC - Snapshot Report ) , Earnings ESP of +3.74% and Zacks Rank #3 (Hold)

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Will CVS Earnings Miss this Quarter?

by Mark Vickery