CVS is looking to close 900 stores in the next three years in a shift to digital
The shares of CVS Health Corp (NYSE:CVS) are up 2.9% this afternoon, following the pharmacy company's decision to shutter 900 of its stores within the next three years -- beginning spring of 2022. CVS is looking to shift much of its business to digital, while turning its brick-and-mortar stores into destinations for healthcare.
The stock has found recent support at the $92 level -- home to its former 2021 peak, as well as its 2020 highs -- following a post-earnings bull gap in early November. The equity hit a five-year peak of $96.57 following the event, and is up 39.4% year-to-date.
Despite this recent price action, short-term options traders have been more put-biased than usual. This is per CVS' Schaeffer's put/call open interest ratio (SOIR) of 0.84, which stands higher than 94% of readings from the past year.
Now looks like an ideal time to join in on trading CVS with options. Thanks to a post-earnings volatility crush, these premiums are relatively on sale. Specifically, CVS sports a Schaeffer's Volatility Index (SVI) of 22%, which stands higher than just 16% of readings from the past year, implying options traders are pricing in low volatility expectations at the moment.
While analysts have remained silent on today's update, the security has been the recipient of a slew of price-target hikes in the weeks following its earnings report. CVS' 12-month consensus price target now sits at $103.67, which is a 9.4% premium to current levels and represents a level not touched since 2016.