Good Morning,
CVS Health is scheduled to announce Q4 earnings results tomorrow morning before market open. I am estimating Revenue at 271.5 B, almost 3 B higher than the consensus estimate.
However, considering CVS has beaten revenue estimates 88% of the time over the last two years, I do not think it will move the stock much.
Attached is my DCF of the Stock, please note with the saturation in the pharmacy market, and the pharmacy market only growing at 1.6 % a year, I am comfortable with the terminal growth rate used for their traditional operations, however I do not have a long-term outlook on their Aetna business, which would require a 3-stage valuation model.
What is interesting about the stocks’ performance this year is investors seemed aware of the minimum wage increase on January 15th, as opposed to when it was announced to be voted on, on the 26th. This is evidenced as the stock becomes inversely correlated from the S&P on the 15th. You can check my estimate of the effect of the bill on the stock price by removing my estimate on line 126 of the balance sheet and watching what it does to the price on line 47 of the DCF Sheet.
Please note, I do not have an Investment in CVS, WIX, or Grammarly.
Warmest Regards,
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