How Will CVS Health Stock React To Its Upcoming Earnings?

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CVS Health (NYSE:CVS) is scheduled to release its earnings report on Thursday, May 1, 2025. Historically, the stock’s reaction to earnings announcements has been evenly split. Over the past five years, CVS stock has experienced a positive one-day return in 50% of instances, with a median positive return of 4.6% and a maximum positive return of 14.9%. Conversely, it has also seen a negative one-day return in the other 50% of instances, with a median negative return of -3.4% and a maximum negative return of -16.8%.

For event-driven traders, understanding these historical patterns, despite the even split, can still offer potential insights. Traders might consider two primary approaches: either establish a position before the earnings release based on the historical probabilities, or analyze the correlation between immediate and medium-term returns after the earnings are announced to guide subsequent trading decisions.

Current consensus estimates project CVS’s earnings per share to be $1.63 on revenues of $93.35 billion. This represents an increase compared to the same quarter last year, which saw earnings of $1.31 per share on revenues of $88.44 billion. The anticipated revenue growth is likely to be supported by a higher volume of prescriptions filled and drug price inflation. However, it’s worth noting that medical costs may continue to exert pressure on CVS’s financials.

From a fundamental perspective, CVS currently has a market capitalization of $82 billion. Its revenue over the last twelve months totaled $373 billion, resulting in an operating profit of $9.8 billion and a net income of $4.6 billion.

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CVS Health’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

  • There are 20 earnings data points recorded over the last five years, with 10 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 50% of the time.
  • Notably, this percentage increases to 58% if we consider data for the last 3 years instead of 5.
  • Median of the 10 positive returns = 4.6%, and median of the 10 negative returns = -3.4%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

CVS 1D, 5D, and 21D Post Earnings Return

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

CVS Correlation Between 1D, 5D and 21D Historical Returns

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of CVS Health stock compared with the stock performance of peers that reported earnings just before CVS Health. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

CVS Correlation With Peer Earnings

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