CVS Health (NYSE: CVS) recently reported its Q4 results, surpassing street estimates with revenues of $93.8 billion and adjusted earnings of $2.12 per share. This exceeded consensus estimates of $90.4 billion and $1.99, respectively. Despite a 6% decline in CVS stock this year, analysts believe there is significant growth potential moving forward.
Over the past three years, CVS stock has shown volatility, with returns of 51% in 2021, -10% in 2022, and -15% in 2023. In comparison, the S&P 500 saw returns of 27% in 2021, -19% in 2022, and 24% in 2023. CVS underperformed the S&P in 2023, reflecting a broader trend where individual stocks struggle to consistently outperform the index.
Despite challenges, CVS Health's valuation indicates room for growth, with an estimated value of $88 per share, representing an 18% upside from its current price of around $74. The company's Q4 revenue of $93.8 billion marked a 12% year-over-year increase, driven by growth across all segments.
Looking ahead, CVS projects earnings between $8.30 and $8.50 per share in 2024, compared to $8.74 in 2023. While CVS expects continued benefits from healthcare services and prescription volume, higher medical costs may impact profitability in the near term.
Trading at under 9x forward earnings, below its historical average, CVS stock presents an opportunity for long-term gains. Investors are advised to consider CVS Health's performance relative to its peers to make informed investment decisions.
Overall, CVS Health's recent financial results and outlook suggest a mixed picture of challenges and opportunities, with the potential for growth in the coming months.
