What Happened?

Shares of diversified healthcare company CVS Health (NYSE:CVS) jumped 16.4% in the morning session after the company reported strong fourth-quarter results that exceeded expectations, with same-store sales significantly surpassing analysts' forecasts and EPS outperforming Wall Street's estimates by a wide margin. Growth was powered by strong performance in the Pharmacy & Consumer Wellness segment​. On the other hand, its full-year EPS guidance missed. Despite this, we think this was a decent quarter.

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What The Market Is Telling Us

CVS Health’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for CVS Health and indicate this news significantly impacted the market’s perception of the business.

CVS Health is up 44.5% since the beginning of the year, but at $63.90 per share, it is still trading 19.9% below its 52-week high of $79.76 from March 2024. Investors who bought $1,000 worth of CVS Health’s shares 5 years ago would now be looking at an investment worth $866.31.

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