CVS Health Corp (CVS) Shares Stumble After Poor Guidance


Although CVS Health Corp (NYSE:CVS) reported solid fourth quarter numbers, which were in line with expectations, the stock is stumbing a bit in the pre-market where shares are trading down $3.18 or 3.55%. The reason? The company’s guidance for the first quarter came in lower than expected.

While fourth quarter earnings per share of $1.53 was exactly what analysts were expecting, and the company’s $41.14 billion in revenue just beat expectations for the quarter of $41.13 billion, guidance was what the market seems to have the major issue with. CVS Health Corp (NYSE:CVS) now says that they expect to earn between $1.14 and $1.17 per share for the first quarter of this year. While they didn’t miss expectations by a wide margin, which were$1.18 per share, the current selloff in the pre-market indicates that investors may have been hoping for the company to guide higher than analysts had been predicting.

The stock increased 0.03% or $0.03 during the last trading session, hitting $89.68. About 11,581 shares traded hands. CVS has declined 14.46% since July 6, 2015 and is downtrending. It has underperformed the S&P500 by 5.60%.

From a total of 10 analysts covering CVS Health (NYSE:CVS) stock, 7 rate it a “Buy”, 0 a “Sell”, and 3 a “Hold”. This means that 70% of the ratings are positive. The highest target price is $132 while the lowest target price is $105. The mean of all analyst targets is $117 which is 30.46% above today’s ($89.68) stock price. CVS Health was the topic of 15 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. Barclays Capital initiated shares on December 18 with a “Overweight” rating. Vetr upgraded shares to a”Buy” rating and a $117.98 target share price in their report from an August 24. Oppenheimer maintained CVS stock in a recent report from December 17 with a “Outperform” rating. Deutsche Bank maintained the rating on August 20. Deutsche Bank has a “Hold” rating and a $121 price target on shares. Finally, JP Morgan maintained the stock with a “Overweight” rating in a report they issued on a November 2.

The institutional sentiment increased to 1.21 in Q2 2015. It’s up 0.15, from 1.06 in 2015Q2. The ratio increased, as 62 funds sold all their CVS Health Corp shares they owned while 529 reduced their positions. 104 funds bought stakes while 611 increased their total positions. Institutions now own 922.81 million shares which is 0.74% more than the previous share count of 916.04 million in 2015Q2.

Dsc Advisors L.P. holds 10.2% of its total portfolio in CVS Health Corp, equating to 217,919 shares. Kdi Capital Partners Llc owns 292,305 shares representing 8.2% of their total US portfolio. Moreover, Cabot has 7.84% of their total portfolio invested in the company, equating to 135,106 shares. The Missouri-based Cortland Associates Inc Mo has a total of 7.82% of their portfolio invested in the stock. Veritas Investment Management Llp, a United Kingdom-based fund reported 349,411 shares owned.

CVS Health Corporation, together with its subsidiaries, is a pharmacy company. The company has a market cap of $97.70 billion. The Firm operates through three business divisions: Pharmacy Services, Retail Pharmacy and Corporate. It has 20.15 P/E ratio. The Pharmacy Services segment provides a range of pharmacy benefit management services and operates under the CVS/caremark Pharmacy Services, Novologix and Navarro Health Services names.