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Thursday, December 3, 2020

CVS Health Corporation (NYSE:CVS) Stock is Plummeting, Here is Why

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CVS Health Corporation (CVS) shares are trading at lower $63.87 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $78.74.

To add more color to this target, the company’s high over the last year is $77.03 and the low is $52.04. Over the last 52 weeks, CVS is up 6.03% while the S&P 500 is up 20.39%%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, CVS reported a profit of $25.1 billion. CVS Health Corporation also saw revenues increase to $65.34 billion. In addition, CVS has free cash flow of $9.23 billion as of 06-2020. The company’s EBITDA came in at $5.78 billion which compares well with its peers.

CVS booked profit margins of 3.10%, its Return on Equity (ROE) is 12.70%, and its Return on Assets is 3.60%. All told, it is clear that, CVS needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. CVS has a short ratio of 2.82 and outstanding shares of 1.31B.

Company Outlook

CVS has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at 6.30. CVS Health Corporation CVS also noted assets of $235.5 billion at the end of the last quarter. Investors should also keep an eye on sector updates as CVS has historically followed its peers on positive news.

All told, CVS Health Corporation CVS has strung together solid data and demonstrated underlying fundamentals. At its current valuation, CVS represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

CVS Health Corporation CVS is now commanding a market cap of 83.30B and a float of 1.31B. CVS is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of CVS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in CVS, either long or short, and we have not been compensated for this article.

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