CVS’s Beaten-Down Stock Gains After It Boosts Outlook
(Bloomberg) -- CVS Health Corp. boosted its profit outlook after posting stronger-than-expected first-quarter results, an encouraging sign for the health giant after it earlier signaled that 2019 could be a tough year.
- The company now expects adjusted earnings per share this year of $6.75 to $6.90, higher than the $6.68 to $6.88 that it had earlier forecast.
- CVS had warned in February of a transition year, as results would likely be hit by rising costs and poor results from a nursing-home pharmacy unit. The performance of some units in the first quarter was helped by the addition of recently acquired Aetna.
- Political pressure on pharmacy-benefit managers has been growing as Washington looks to rein in drug prices. CVS’s Caremark is one of the biggest PBMs, and along with rivals it faces a probe by several states of its business practices.
- The drugstore business has been squeezed by competitive pressure from online retailers and political wrangling over prescription costs, though CVS’s sales in the quarter were better than forecast. Last month, Walgreens warned its profits would be flat this year, hitting that company’s stock hard.
CVS shares rose 3.5 percent to $56.29 at 9:34 a.m. in New York on Wednesday. Through Tuesday’s close, the stock had fallen 17 percent this year amid a widespread decline in shares of insurers and other health-care companies.
- Read more details on CVS’s results here.
- View the company’s full news release here.
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