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CVS Health (CVS) to Report Q3 Earnings: What's in the Cards?

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·5 min read
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  • CVS
  • VRTX
  • PODD

CVS Health Corporation CVS is scheduled to report third-quarter 2021 results on Nov 3, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 16.9%. It beat earnings estimates in each of the trailing four quarters, the earnings surprise being 16.06%, on average.

Factors at Play

Over the recent months, CVS Health’s specialty digital solutions for patients have been growing strongly. The company is seeing a significant part of its specialty orders being placed digitally, with primary growth drivers being engagement in an expanded set of digital health services such as COVID testing, vaccinations and omni-channel pharmacy.

Being an active member of the President’s vaccination drive, the company is relying on its consumer-centric digital approach to administering vaccines, with an administration of 30 million vaccines and 29 million tests until the end of the second quarter. With the growing number of new COVID-19 cases through the third-quarter months, we expect this to have continued through the quarter, thus adding to the top line of CVS Health.

Moreover, in August 2021, CVS Health announced the availability of flu shots at all CVS Pharmacy and MinuteClinic locations across the country. In September 2021, CVS Health announced the availability of COVID-19 booster shots at nearly 6,000 CVS Pharmacy and MinuteClinic locations. We believe these developments to have contributed significantly to the company’s third-quarter retail segment revenues.

CVS Health has also been expanding access to care through digital and virtual channels. In August 2021, CVS Health’s company Aetna introduced Aetna Virtual Primary Care -- an innovative health care solution that offers a simple, affordable and convenient way for eligible members to receive quality primary care remotely and in person from their known physician-led care team. This is expected to have contributed to CVS Health’s to-be-reported quarter growth. As a major step toward digital health, the company’s recently launched CVS Health Ventures fund that gives insight into new digital health innovations is also expected to have benefitted the company in the third quarter, thus adding to the top line.

CVS Health Corporation Price and EPS Surprise

CVS Health Corporation Price and EPS Surprise
CVS Health Corporation Price and EPS Surprise

CVS Health Corporation price-eps-surprise | CVS Health Corporation Quote

Within pharmacy services, the company is expected to have achieved strong revenue growth given the gradually increasing number of walk-in-clinical appointments and patient visits. Moreover, the company has a huge PBM client base, which is expected to have seen a strong sequential rebound in third-quarter revenues. Improvements in purchasing economics and the ongoing benefit from several generic launches are also expected to have fueled growth.

In recent times, the company has been experiencing growth in Specialty Pharmacy and brand inflation. The specialty pharmacy capabilities are expected to have witnessed continued growth, led by the company’s new investment in Coram infusion professionals and Novologix. The company’s newly developed comprehensive set of programs to effectively manage specialty trends, including the formulary exclusion strategy, is also expected to have fueled growth in the to-be reported quarter.

Within healthcare benefits, the company earlier noted that medical cost utilization largely returned to normal levels. This trend is likely to have continued through the third quarter. Further, this segment is expected to have gained from significantly lower medical costs. Moreover, like the last-reported quarter, the company is expected to have witnessed strong momentum within Health Care Benefits business arm fueled by continued growth in Government Services.

The Estimate Picture

The Zacks Consensus Estimate for third-quarter adjusted earnings of $1.79 suggests a 7.83% rise from the year-ago quarter reported figure. The consensus estimate for revenues is currently pegged at $70.12 billion, indicating 4.56% growth from the year-earlier reported number.

What the Quantitative Model Predicts

Our proven model predicts an earnings beat for CVS Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: CVS Health has an Earnings ESP of +1.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CVS Health carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks that have the right combination of elements to beat on earnings this reporting cycle.

Exelixis EXEL has an Earnings ESP of +20.00% and a Zacks Rank of 1. The company will release third-quarter fiscal 2021 results on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Insulet Corporation PODD has an Earnings ESP of +15.79% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Nov 4.

Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +10.62% and a Zacks Rank of 2. The company will report third-quarter 2021 results on Nov 2.


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CVS Health Corporation (CVS) : Free Stock Analysis Report

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