Despite the recent stock decline, analysts are still bullish on CVS ahead of earnings

CVS Health (CVS) will report third-quarter results before the market opens on Wednesday after the pharmacy and healthcare provider had a difficult October that included a CEO change and layoffs, among other cost-cutting measures.

Despite the roughly 30% year-to-date decline, the 13 analysts covered by Visible Alpha remain largely bullish on CVS stock, with nine “buy” ratings and four “hold” ratings. However, the average price target of $68.69 implies that analysts expect CVS to recoup some – but not all – of its losses since the start of 2024. The stock closed Monday at $54.65, down 2%.

Revenue is expected to rise to $93.02 billion in the quarter, up about 3.6% year-over-year. However, Visible Alpha estimates net income is expected to fall more than 40% to $1.29 billion, or $1.05 per share.

The earnings follow the CEO swap and reports of a possible separation

CVS reports its latest earnings after a tumultuous October that began with reports that it was considering a breakup of its namesake pharmacies and health insurer Aetna after disappointing profits in the first two quarters of 2024 and repeatedly lowering profit forecasts.

Weeks after it was announced that the company had met with hedge fund Glenview Capital Management to discuss possible changes to its operations, CVS announced Oct. 18 that company veteran David Joyner would take over as chief executive officer (CEO). . The company also released preliminary third-quarter earnings per share (EPS) forecasts of 3 cents to 8 cents at the time and said it would provide new full-year guidance at its earnings call on Wednesday.

CVS shares have fallen 19% since mid-October.