- FY Adjusted EPS falls short of estimates: CVS forecasts adjusted EPS between $6.40 to $6.65, below the previous forecast of at least $7 and the estimate of $6.97.
- EPS projection lowered: Expected EPS now ranges between $4.95 and $5.20, down from a prior expectation of at least $5.64.
- Cash flow from operations reduced: Projected at $9 billion, below the previous forecast of at least $10.5 billion and the estimate of $11.26 billion.
- Q2 Results:
- Adjusted EPS at $1.83, down from $2.21 y/y but higher than the estimate of $1.73.
- Comparable sales increased by 6.4%, compared to a 10.9% rise y/y and an estimate of a 1% increase.
- Net revenue at $91.23 billion, up by 2.6% y/y, slightly missing the estimate of $91.45 billion.
- Healthcare Benefits revenue grew by 21% y/y to $32.48 billion, surpassing the estimate of $31.91 billion.
- Health services revenue fell by 8.8% y/y to $42.17 billion, although exceeding the estimate of $41.18 billion.
- Pharmacy network revenues dropped by 20% y/y to $21.85 billion, below the estimate of $22.1 billion.
- Mail and specialty revenue increased by 2.4% y/y to $17.65 billion, higher than the estimate of $16.54 billion.
- Total pharmacy claims processed stood at 471.2 million, down by 18% y/y but meeting the estimate of 471.07 million.
- Pharmacy and consumer wellness revenue rose by 3.7% y/y to $29.84 billion, exceeding the estimate of $28.93 billion.
- Corporate & Other revenue saw a rise of 34% y/y to $111 million, above the estimate of $104.2 million.
- Adjusted operating income dropped by 16% y/y to $3.74 billion, yet still above the estimate of $3.63 billion.
- Cost-saving initiative: CVS initiated a $2 billion multi-year cost savings plan to optimize operations and boost the use of technology.
Cvs Health Corp on Smartkarma
Analysts on Smartkarma, like Baptista Research, are closely covering CVS Health Corp, providing valuable insights for investors. In a recent report titled “CVS Health Corporation: Will The Increasing Margin in Medicare Advantage Last? – Major Drivers,” Baptista Research discusses the Q1 2024 earnings of CVS Health. Despite positive aspects, lower-than-expected earnings per share of $1.31 were reported due to utilization pressures in Medicare Advantage, impacting the Health Care Benefits segment. As a result, CVS revised its 2024 guidance, lowering adjusted EPS expectations to at least $7.
In another analysis by Baptista Research, “CVS Health Corporation: Integration Of Acquired Businesses,” the firm acknowledges CVS Health’s successful navigation of challenges and meeting financial commitments. The report highlights the company’s strong diversified business model and evaluates various factors that may influence its stock price. Utilizing a Discounted Cash Flow methodology, Baptista Research conducts a fundamental analysis of CVS Health’s historical financial statements, providing in-depth insights for potential investors.
A look at Cvs Health Corp Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 4 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Analysing the Smartkarma Smart Scores for CVS Health Corp, the company’s overall outlook appears promising. With strong scores of 4 in both the Value and Dividend categories, CVS Health Corp showcases stability and attractiveness in terms of investment potential. This indicates that the company is well-positioned in terms of its financials and ability to provide consistent returns to its investors.
However, with slightly lower scores in Growth, Resilience, and Momentum, CVS Health Corp may face challenges in terms of its growth prospects, ability to withstand economic uncertainties, and momentum in the market. Despite these concerns, the company’s core operations as an integrated pharmacy healthcare provider across various segments positions it as a key player in the industry.
Summary: CVS Health Corporation stands as an integrated pharmacy healthcare provider, offering a range of services including pharmacy benefit management, retail pharmacies, disease management programs, and retail clinics across the U.S., the District of Columbia, and Puerto Rico.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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