CVS Health (NYSE:CVS) is scheduled to announce Q2 earnings results on Wednesday, August 7th, before the market open.
Analysts expect profit of $1.73 (-21.7% Y/Y) on revenue of $91.43B (+2.8% Y/Y).
Investors will be looking out for comments on medical cost trends, while some are fearing guidance cut.
“For CVS, the magnifying glass remains on how MA cost trend evolves relative to their latest expectations after having admittedly mispriced an exponentially expanding book in 2024. While feedback has been mixed, we’d argue MCO reports QTD had some elements of encouraging commentary on MA cost trend,” says Morgan Stanley.
Over the last 2 years, CVS has beaten EPS estimates 88% of the time and has beaten revenue estimates 88% of the time.
Over the last 3 months, EPS estimates have seen 0 upward revisions and 8 downward. Revenue estimates have seen 0 upward revisions and 6 downward.
“Broader expectations are pointing to a guidance cut (~$0.50) in the variable backdrop. However, management’s ability to speak through medical cost dynamics this quarter and reassure investors that the latest guidance remains intact will go a long way in improving investor sentiment.
Although, if necessary, a reduction in guidance and transparent rationale alongside could be a welcomed reset”, Morgan Stanley added.
The stock has fallen 27% YTD, and has a Hold rating on SA Quant system.
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