New Buy Signal Supports Breakout in CVS Caremark

by Sam Collins | May 7, 2014 1:16 am

New Buy Signal Supports Breakout in CVS Caremark

CVS Caremark (CVS[1]) — This is the largest pharmacy services provider and second largest drugstore chain in the U.S. On Friday, the company reported first-quarter adjusted EPS of $1.02, a 23% increase from $0.83 last year. The company reaffirmed its estimate of $4.36 to $4.50 for 2014.

Following the earnings announcement, S&P increased its target price by $5 to $80 by assuming a P/E of 15.5 times its 2015 EPS estimate of $5.13.

CVS jumped from just below its 50-day moving average on Monday following three days of heavy buying. MACD flashed a new buy signal, supporting the view that the stock has the ability to break above the high made on March 26 at $76.36.

The trading target for CVS is $80, but investors should expect a much higher return within 12 months.

05 07 14 cvs1 300x187 New Buy Signal Supports Breakout in CVS Caremark
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chart key 300x84 New Buy Signal Supports Breakout in CVS Caremark[2]

Endnotes:
  1. CVS: http://studio-5.financialcontent.com/investplace/quote?Symbol=CVS
  2. [Image]: http://investorplace.com/wp-content/uploads/2013/12/chart-key.gif

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