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CVS Health (CVS) to Report Q1 Earnings: What's in the Cards?
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CVS Health Corporation (CVS - Free Report) is scheduled to report first-quarter 2023 results on May 3, before the opening bell.
In the last reported quarter, the company’s adjusted earnings of $1.99 exceeded the Zacks Consensus Estimate by 3.1%. The company beat estimates in the trailing four quarters, the average surprise being 5.88%.
Let’s look at how things have shaped up for CVS Health prior to this announcement.
Factors at Play
CVS Health’s retail/long-term care segment is likely to have benefited from the increased prescription and front store volume, similar to the fourth quarter 2022. The company’s efforts to optimize the retail portfolio, which now consists of three models, including advanced primary care clinics, enhanced health hub locations and traditional CVS pharmacy locations, are likely to have been advantageous for the upcoming Q1 results.
CVS Health has been making noteworthy progress in expanding access to care through digital and virtual channels. During the fourth quarter 2022, CVS Health increased unique digital customers by seven million to over 47 million and reached eight million active users on it’s individualized Health Dashboard. The company also interacted with nearly five million customers daily across the community footprint. We believe this development to have benefited the company’s first-quarter 2023 revenues significantly.
The company also launched a variety of new MinuteClinic virtual care services to support women's health that will be available 24/7. CVS Health’s contained efforts to expand digital health services and deepen engagement through personalization are expected to have broadened its customer base in Q1, thus adding to its top line.
In January 2023, CVS Health collaborated with RUSH University System for Health (RUSH) to expand access for Medicare patients to RUSH clinical services in the Chicago area. The collaboration enables patients seeking health services at various ACO REACH-participating MinuteClinic locations in Chicago and Evanston to access follow-up primary and speciality care with RUSH and other ACO REACH entities. This development is expected to have boosted CVS Health’s performance in the to-be-reported quarter.
The pharmacy services segment is expected to have recorded robust sales growth, banking on increased pharmacy sales and prescriptions filled, driven by demand for consumer health and cough, cold, and flu products. Also, growth in specialty pharmacy and brand inflation is also likely to have been contributing factors in the pharmacy services arm. We are also positive about the company’s newly developed comprehensive set of programs to manage specialty trends, which includes a formulary exclusion strategy.
Moreover, we also expect drug price inflation, new product launch, higher utilization and new PBM clients to fuel growth. This would simplify and accelerate the process of filling prescriptions, thus benefiting the business performance in Q1.
The healthcare benefits arm is likely to have been driven by sustained membership growth across all product lines. During the fourth quarter 2022, medical membership increased by 109,000 members, reflecting increases across all product lines. The segment witnessed favorable development of prior periods’ healthcare cost estimates in its Government Services and Commercial businesses during the fourth quarter 2022. We expect this growth momentum to continue. Further, CVS Health’s competitive cost structure, integrated benefit designs and innovative product portfolio position the healthcare benefits business for further growth.
Key Q1 Estimates
The Zacks Consensus Estimate for first-quarter 2023 adjusted earnings of $2.10 per share implies a 5.4% fall from the year-ago reported figure.
The consensus estimate for revenues is pegged at $81.60 billion, suggesting 6.2% fall from the prior-year reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a higher chance of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: The company has an Earnings ESP of -0.76%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are some medical stocks which have the right combination of elements to post an earnings beat this quarter, per our model.
The company is slated to release first-quarter 2023 results on May 4.
Bio-Rad has a 2023 expected earnings growth rate of 10.3%. BIO’s earnings yield of 3.38% compares favorably with the industry’s yield (2.78%).
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.99% and sports a Zacks Rank of 1. Henry Schien is expected to release first-quarter fiscal 2023 results on May 2.
HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched once, the average beat being 2.9%. HSIC’s 2024 growth rate is estimated to be 7.7%.
Teva Pharmaceutical Industries Limited (TEVA - Free Report) currently has an Earnings ESP of +14.97% and a Zacks Rank of 2. TEVA is expected to release first-quarter 2023 results on May 2.
TEVA’s 2024 growth rate is estimated to be 4.4%. TEVA’s earnings yield of 28.74% compares favorably with the industry’s yield (34.35%).
Image: Bigstock
CVS Health (CVS) to Report Q1 Earnings: What's in the Cards?
CVS Health Corporation (CVS - Free Report) is scheduled to report first-quarter 2023 results on May 3, before the opening bell.
In the last reported quarter, the company’s adjusted earnings of $1.99 exceeded the Zacks Consensus Estimate by 3.1%. The company beat estimates in the trailing four quarters, the average surprise being 5.88%.
Let’s look at how things have shaped up for CVS Health prior to this announcement.
Factors at Play
CVS Health’s retail/long-term care segment is likely to have benefited from the increased prescription and front store volume, similar to the fourth quarter 2022. The company’s efforts to optimize the retail portfolio, which now consists of three models, including advanced primary care clinics, enhanced health hub locations and traditional CVS pharmacy locations, are likely to have been advantageous for the upcoming Q1 results.
CVS Health has been making noteworthy progress in expanding access to care through digital and virtual channels. During the fourth quarter 2022, CVS Health increased unique digital customers by seven million to over 47 million and reached eight million active users on it’s individualized Health Dashboard. The company also interacted with nearly five million customers daily across the community footprint. We believe this development to have benefited the company’s first-quarter 2023 revenues significantly.
The company also launched a variety of new MinuteClinic virtual care services to support women's health that will be available 24/7. CVS Health’s contained efforts to expand digital health services and deepen engagement through personalization are expected to have broadened its customer base in Q1, thus adding to its top line.
CVS Health Corporation Price and EPS Surprise
CVS Health Corporation price-eps-surprise | CVS Health Corporation Quote
In January 2023, CVS Health collaborated with RUSH University System for Health (RUSH) to expand access for Medicare patients to RUSH clinical services in the Chicago area. The collaboration enables patients seeking health services at various ACO REACH-participating MinuteClinic locations in Chicago and Evanston to access follow-up primary and speciality care with RUSH and other ACO REACH entities. This development is expected to have boosted CVS Health’s performance in the to-be-reported quarter.
The pharmacy services segment is expected to have recorded robust sales growth, banking on increased pharmacy sales and prescriptions filled, driven by demand for consumer health and cough, cold, and flu products. Also, growth in specialty pharmacy and brand inflation is also likely to have been contributing factors in the pharmacy services arm. We are also positive about the company’s newly developed comprehensive set of programs to manage specialty trends, which includes a formulary exclusion strategy.
Moreover, we also expect drug price inflation, new product launch, higher utilization and new PBM clients to fuel growth. This would simplify and accelerate the process of filling prescriptions, thus benefiting the business performance in Q1.
The healthcare benefits arm is likely to have been driven by sustained membership growth across all product lines. During the fourth quarter 2022, medical membership increased by 109,000 members, reflecting increases across all product lines. The segment witnessed favorable development of prior periods’ healthcare cost estimates in its Government Services and Commercial businesses during the fourth quarter 2022. We expect this growth momentum to continue. Further, CVS Health’s competitive cost structure, integrated benefit designs and innovative product portfolio position the healthcare benefits business for further growth.
Key Q1 Estimates
The Zacks Consensus Estimate for first-quarter 2023 adjusted earnings of $2.10 per share implies a 5.4% fall from the year-ago reported figure.
The consensus estimate for revenues is pegged at $81.60 billion, suggesting 6.2% fall from the prior-year reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a higher chance of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: The company has an Earnings ESP of -0.76%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are some medical stocks which have the right combination of elements to post an earnings beat this quarter, per our model.
Bio-Rad Laboratories (BIO - Free Report) has an Earnings ESP of +0.16% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to release first-quarter 2023 results on May 4.
Bio-Rad has a 2023 expected earnings growth rate of 10.3%. BIO’s earnings yield of 3.38% compares favorably with the industry’s yield (2.78%).
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.99% and sports a Zacks Rank of 1. Henry Schien is expected to release first-quarter fiscal 2023 results on May 2.
HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched once, the average beat being 2.9%. HSIC’s 2024 growth rate is estimated to be 7.7%.
Teva Pharmaceutical Industries Limited (TEVA - Free Report) currently has an Earnings ESP of +14.97% and a Zacks Rank of 2. TEVA is expected to release first-quarter 2023 results on May 2.
TEVA’s 2024 growth rate is estimated to be 4.4%. TEVA’s earnings yield of 28.74% compares favorably with the industry’s yield (34.35%).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.