About to Buy CVS Health Corporation (CVS)? Look at These Metrics First

Analysts at Barclays, assumed coverage of CVS Health Corporation (NYSE:CVS) with Overweight recommendation, according to their opinion released on December 18.

By watching the trading activity of corporate insiders, it will become easier to get a sense of CVS Health Corporation (NYSE:CVS)’s prospects. The earliest insider trade took place on 01/08/2019. Merlo Larry J parted with a total of 166.37 thousand shares of company at average share price of $69.04. The total for the sales was set at $11.49 million. After this transaction, the President and CEO account balance stood at 1.03 million shares. The stock lost -7.68 percent since that insider sale. On 11/29/2018, Denton David M, EVP and CFO, sold 25.16 thousand shares at a price per share of $80.13. This removed 2.02 million shares from the insider’s fortune and the stock saw a -20.45 percent retreat in value since the news became public. This transaction left 0.4 thousand shares in the EVP and CFO account. On 11/14/2018, EVP and Chief Medical Officer Brennan Troyen A performed a sale transaction worth $1.17 million. This sale at $82 each has eliminated 14.23 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -22.27 percent decrease since the transaction was reported. The insider now is left with 24.56 thousand shares remaining in the account. Bisaccia Lisa, who performs the EVP and Chief HR Officer job, sold 21.53 thousand shares for $1.72 million. The disposal occurred on 10/01/2018 was priced at $80 per share. The share price plunged -20.33 percent since the reporting date. Bisaccia Lisa now left with a stake of 31.38 thousand CVS stock worth $2 million after the insider selling.

CVS Health Corporation (CVS) is expected to jump by 42.36 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $106price as 12-month high target. This represents a whopping 66.3 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $92, which represents a return potential of 44.34 percent when compared to the closing price of the stock of $63.74 on Tuesday, January 15. The lowest price target for the stock is $71 — slightly more than 11.39 percent from CVS’s current share price.

The shares are currently floating around the first support level of $62.98. Below this, the next support is placed in the zone of $62.22. Till the time, the CVS stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 31.17 on daily chart, which may remain a cause for comfort. If the price breaks below $62.22 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $64.66 mark may result into a pull-back move towards $65.58 level.

CVS shares dropped -1.6 points or -2.45 percent on Tuesday to $63.74 with a heavy trade volume of 15.471 million shares. After opening the session at $64.68, the shares went as high as $64.82 and as low as $63.14, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $82.1 billion and now has 1.29 billion shares outstanding. CVS Health Corporation (CVS) stock has lost -13.13 percent of market value in 21 trading days.

CVS stock has a trailing 3-year beta of 1.1, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.56 a share in the trailing twelve months. The stock’s value has fallen -2.72 percent year to date (YTD) against a decline of -19.09 percent in 12 month’s time. The company’s shares still trade -24.01 percent away from its 1-year high of $83.88 and 5.99 percent up from 52-week low of $60.14. The average consensus rating on the company is 1.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of CVS Health Corporation (CVS) are trading at a P/E ratio of 15.33 times earnings reported for the past 12 months. The industry CVS operates in has an average P/E of 27. Its P/E ratio went as low as 15.99X and as high as 24.24 over the 5-year span. Further, it is sporting a 0.44 on the Price-to-Sales ratio. Compare this with the industry average P/S of 18.11. 15.6 percent is the gross profit margin for CVS Health Corporation and operating margin sits at 3.1 percent. Along with this, the net profit margin is 1.6 percent.

CVS will be showing off its Q4 earnings on February 07. Analysts are forecasting revenue to climb 12.9 percent to $54.6B in the next fiscal quarter, while earnings are seen soaring by nearly 5.73 percent to $2.03 per share. History has shown that shares in CVS Health Corporation have gone up on 20 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.73 per share, better than the $1.71, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $47.3B, better than the $47.2B analysts expected. Earnings are estimated to increase by 1.8 percent this year, 8.6 percent next year and continue to increase by 12.45 percent annually for the next 5 years.