Summary:
- CVS Health (NYSE:CVS) rose 5% on Wednesday after the company posted earnings that beat Wall Street expectations.
- Based on its market cycles, we believe the stock is due for a modest pullback, but looking good into early next year.
CVS Stock Weekly Chart
The company reported earnings per share of $1.84 and total revenue of $64.8 billion, compared to analyst estimates of $1.77 and $63 billion. Looking forward, management projects earnings between $6.97 and $7.05, compared to the consensus of $6.98.
CVS also announced that it would close 22 stores in the coming year, which is in addition to the 46 stores it closed in 2019. This is part of a retail trend, with its competitor Walgreens closing 200 stores.
Our approach to stock analysis uses market cycles to project price action. While CVS is still in the rising phase of its current cycle, it is now trading near the top of a major resistance zone. In any case, the stock is in great shape. We see it much higher into early 2020.
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