CVS stock very well could be the big bet you're missing
CVS Health (NYSE: CVS) faces two distinct headwinds that are
putting pressure on CVS stock.
First, markets are cautious over the drug store and drug
manufacturing market as the government pressure all players to lower drug
prices.
Doubts over CVS’ acquisition of Aetna are adding more
distractions for management in the near-term. With CVS stock testing the $51.72
yearly low on at least five occasions since March, what will it take for the
stock to rebound?
CVS reported first-quarter earnings of $1.62 and also raised
its full-year adjusted EPS guidance to $6.75 to $6.90. This is up from the
previous guidance of $6.68 to $6.88 a share.
The Q1 beat and improved outlook are due largely to the
inclusion of managed care operations. The company also included revenue from
SilverScript Medicare Part D, which contributed $17.9 billion of revenue for
the quarter.
Better synergies with Aetna also contributed favorably to
the higher outlook. CVS expects it will exceed its target savings of $750
million in 2020. It found synergies stemming from the elimination of
duplication in corporate and operational functions, medical cost savings such
as formulary alignment, and purchasing efficiencies. By 2022, CVS forecast
saving $1.5 billion to $2 billion, well above its deal synergy targets.
No comments:
Post a Comment