CVS Health $CVS just had its best earnings reaction ever. It was fantastic.
The company issued a guidance for 2025 that was much better than expected. They plan to make between $5.75 and $6 of earnings per share this year.
David Joyner, the recently appointed CEO, has also done a fabulous job stabilizing Aetna's performance. This is what the market wants.
Let's talk about what else happened 👇
Here are the latest earnings reactions from the S&P 500:
*click the image to enlarge it
As you can see, CVS Health had the best earnings reaction and reaction score during Wednesday's trading session.
On the downside, Westinghouse Air Brake Technologies had the worst earnings reaction and reaction score.
Now, let's dig into the data 👇
CVS had its best earnings reaction ever:
CVS Health was on the verge of resolving a multi-decade Kardashian topping pattern. This earnings reaction happened exactly when the bulls needed to step up and buy.
On a relative basis, the stock has resolved a distribution pattern that goes back to the 20th century versus the broader market. This suggests a breakdown is coming in absolute terms.
As long as CVS is above 50, the path of least resistance is sideways.
GILD had its best earnings reaction since Q4 2022:
Gilead Sciences beat its expectations and rallied 7.5% with a reaction score of 5.5. It was great.
The company's HIV drug, Biktarvy, is performing exceptionally well and commands over 50% market share in the United States.
In addition, they announced a 2.6% increase in the quarterly cash dividend. The stock now pays $0.79 per share.
The stock price is working up the right-hand side of a multi-decade accumulation pattern.
If GILD is above 98, the path of least resistance is higher.
CME is flirting with a base breakout:
CME Group beat its expectations and rallied 3% with a reaction score of 3.5. It was a solid report.
The company increased total revenues by 6% Y/Y in Q4 2024, led by a 9% increase in market data revenue. They are capitalizing on the demand for data and analytics.
In addition, they announced a 9% increase in the quarterly dividend, raising it to $1.25 per share.
They also issued guidance that was better than the market was expecting.
We think CME is about to enter a brand-new uptrend. A close above 250 would shift the path of least resistance from sideways to higher.
WAT is finding sellers at the prior cycle's peak:
Waters beat its expectations but fell nearly 3% with a reaction score of -4. The lousy reaction was because the company issued conservative guidance.
The light guidance is primarily due to foreign exchange headwinds, which have been an issue for over a year.
As long as WAT is below 425, the path of least resistance is sideways.
BIIB has dropped after 16 of its last 20 earnings reports:
Biogen beat its expectations but fell over 4% with a reaction score of -1.5. This company is a disaster.
The company's multiple sclerosis product revenues keep declining because of increased generic and biosimilar competition.
In addition, they plan to burn around $3.9B in operating expenses in 2025. This is far more than investors want to pay.
The path of least resistance for BIIB is lower for the foreseeable future.
WAB had its worst earnings reaction since Q1 2021:
Westinghouse Air Brake missed its expectations and fell 9% with a reaction score of -5.9. It was really bad.
The company revised its 2025 revenue growth outlook from low double-digits to mid-single digits.
We expect WAB to trade sideways for the foreseeable future.
