CVS Caremark Corporation : The USD 41.75 support area is tested
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07/26/2012 | 08:31am
Opinion : Bullish above 44.43 USD
Target price : 48.61 USD
Stop loss: 42.5 USD
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NYSE
Retail - Drugs |
In the past few sessions, CVS Caremark Corporation, drug retailing company with a pharmacy chain, have suffered from a sharp fall and is now coming back on significant level support.
From a fundamental viewpoint, CVS Caremark Corporation is undervalued in terms of enterprise value. Based on the current price, its market capitalization, minus its net debt, represents 0.53 times its revenues. Furthermore, EPS estimates have been revised upward in the last few months by analysts. Nonetheless, recently, EPS estimates for the two coming years has been revised upward by analysts. This positive fact opens the way for a better evaluation of the security by investors.
Currently the stock is oversold and, in the mid-term, it is trading in a bearish trend. In the short term, this trend is reversed upon contact with the USD 44.43 area. The security should be able to confirm its increase in the next trading sessions. This support is a trading opportunity in order to anticipate a technical rebound towards USD 46.9 and by extension towards USD 48.61.
Therefore, the proximity of the USD 44.43 support is an opportunity to take a long position. In fact, the security has to cross this area in order to re-establish a bullish trend in the short term. A stop loss order can be placed under the support currently tested.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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15,8x |
14,1x |
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Capitalization / Revenue
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0,57x |
0,55x |
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EV / Revenue
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0,64x |
0,62x |
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EV / EBITDA
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8,16x |
7,67x |
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Yield (DPS / Price)
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1,46% |
1,73% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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6,36% |
6,46% |
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operating laverage (Delta EBIT / Delta Sales)
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1,71x |
1,45x |
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Net Margin (Net Profit / Revenue)
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3,59% |
3,77% |
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ROA (Net Profit / Asset)
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8,80% |
9,22% |
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ROE (Net Profit / Equities)
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11,8% |
13,3% |
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Rate of Dividend
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23,1% |
24,4% |
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