On Dec 19, 2013, Zacks Investment Research downgraded
CVS Caremark Corporation
) to a Zacks Rank #3 (Hold) from a Zacks Rank #2 (Buy).
Why the Downgrade?
Though the generic wave in the pharmaceutical industry is poised
to be in favor of CVS, dwindling front-end sales reflect sluggish
demand characterizing the U.S. economy. Intense competition and
tough industry conditions act as major hurdles for the company.
Express Scripts Holding Company
) once again joining forces, we believe that CVS might lose some
momentum in the coming days.
CVS Caremark reported third quarter adjusted earnings per share
(EPS) of $1.05, beating the Zacks Consensus Estimate of $1.02 by
6.86%. CVS Caremark expects its adjusted earnings to be in the
range of $4.36 to $4.50, reflecting a growth of 10.25% to 13.75%
in fiscal 2014.
The persistent weak macro economic conditions could further
hamper the growth prospects as the company is already facing
pricing pressure and incurring high operating expenses due to
increased competition particularly in the Pharmacy Benefit
Management (PBM) and retail segments.
CVS Caremark has witnessed sharp downward estimate revisions for
2013 with 4 estimates going down in the past 30 days and no
upward revision over the same time horizon.
The Zacks Consensus Estimate for 2013 decreased 0.25% to $3.96
per share over the last 30 days. However, the Zacks Consensus
Estimate for 2014 rose to $4.47 from $4.46 over the same time
frame, reflecting an increase of 0.22%.
Other Stocks to Consider
Currently, the stock carries a Zacks Rank #3 (Hold). Investors
interested in the industry can look at
), which carries a Zacks Rank #2 (Buy).
CVS CAREMARK CP (CVS): Free Stock Analysis
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