CVS Health Corp. (NYSE:CVS) plunged in pre-market trading after announcing disappointing Q1 results and a downward revision of its outlook. The drugstore chain reported adjusted Q1 earnings of $1.31 per share, marking a 40.5% decline compared to the previous year and falling short of consensus estimates of $1.71 per share.
The company’s revenues grew by 3.7% year-over-year to $88.4 billion but fell short of Street estimates of $89.3 billion. More importantly, its health services segment saw its Q1 revenues decline by 9.7% year-over-year to $40.3 billion due to the loss of a large client.
CVS Slashes FY24 Outlook
Looking forward, CVS slashed its FY24 guidance due to higher medical costs for the rest of this year. The company now expects adjusted earnings of $7 per share, which is down from its prior forecast of $8.30 per share. It has projected its cash flow from operations to be $10.5 billion in FY24 as compared to its prior guidance of $12 billion.
Is CVS a Good Stock to Buy?
Analysts remain cautiously optimistic about CVS stock, with a Moderate Buy consensus rating based on 12 Buys and six Holds. Year-to-date, CVS has declined by more than 10%, and the average CVS price target of $87.53 implies an upside potential of 29.3% from current levels. However, these analyst ratings are likely to change following CVS’s Q1 results today.
