CVS Health Evolving into an Integrated Healthcare Organization

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Pharmacy, Insurance and Healthcare Providers CVS Health Corporation (NYSE:CVS) The shares are trading near 52-week lows despite the recent rally in benchmark indices. The company has evolved from a drug store chain to an integrated healthcare company offering healthcare provider and payer services.

it competes Walgreens Boots Alliance Inc. (NYSE: WBA) And Rite-Aid Company (NYSE: RAD) In the Pharmacy Benefit Management section. Incidentally, CVS Health and Walgreens agreed to a $10.7 billion settlement over their roles in the opioid crisis without admitting fault. As a result, CVS would owe $5 billion over ten years.

The company is firing on all cylinders. It saw revenue and adjusted operating income growth in its health care benefits, pharmacy and insurance segments, with top-line growth in its retail drug store business but a (-18.9%) decrease in adjusted operating income offset by normalization. COVID testing and vaccination.

primary care services

CVS Health provides primary care services through its Minute Clinics and Reflects Health network of more than 10,000 physicians, while providing pharmacy benefits management services and filling prescriptions for its customers. CVS is one of the largest pharmacy drug stores in the world, with more than 9.9 thousand retail pharmacies and more than 1,100 walk-in clinics in the US.

Being both a provider and a payer. The company has transformed into an integrated healthcare organization to increase its primary care footprint.

health insurer

The $69 billion acquisition of Aetna Health Insurance in 2018 made CVS Health the only insurer to payer for health services. Its Aetna Health Insurance division added 590,000 members in its latest quarter and delivered 10% top-line growth. It offers health insurance products for employers, individuals, college students, healthcare providers, labor groups, government-sponsored plans, and Medicare Advantage.

Medicare Advantage is an alternative to traditional Medicare Part C insurance for seniors paid for by Social Security benefits offered by the US government.

Medicare Advantage

Medicare Advantage for seniors offers HMO and PPO plans that typically cover all services minus co-pays versus an 80/20 insurer and patient responsibility mix through traditional Medicare. They also have additional services that are not in traditional Medicare, such as vision, dental, hearing, and wellness programs.

Medicare Advantage plans also cover prescription drugs with low out-of-pocket costs. has been a growth driver for competitors such as Medicare Advantage Humana (NYSE: HUM), UnitedHealth Group (NYSE: UNH), Cigna Corporation (NYSE: CI)and Anthem Inc.

hit steady earnings

On November 2, 2022, CVS Health reported third quarter 2022 financials for the quarter ending September 2022. The analyst estimates a profit of $1.99, down from $0.10.

Revenue rose 10% year-over-year (YoY) to $81.16 billion, beating analyst estimates of $76.78 billion. Its health care benefits segment grew 9.9%, with a 39.6% increase in adjusted operating income. The pharmacy segment saw annual revenue growth of 10.7% as adjusted operating income grew 5.9%, while total pharmacy claims processing grew only 3.6%.

Its retail segment sales grew 6.9% but adjusted operating income fell (-18.9%) due to lower COVID-19 testing and vaccinations.

Karen Lynch, CEO of CVS Health, commented, “We delivered another outstanding quarter and consequently raised full year guidance. We continue to execute our strategy with a focus on expanding capabilities in health care delivery.” and the announced acquisition of Signify Health will further strengthen our engagement with consumers.”

raising guidance

CVS Health raised its fiscal full-year 2022 EPS guidance from $8.55 to $8.65 versus the $8.55 consensus analyst estimate. Its original range was between $8.40 and $8.60 for EPS. In addition, the company raised cash flow from operating guidance to $13.5 billion to $14.5 billion, up from $12.5 billion to $13.5 billion.

CVS Health Evolving into an Integrated Healthcare Organization

Weekly Rectangle Breakdown Set-up

The weekly candlestick chart of CVS shows the rectangle trading range since April 2022. Upper range resistance is at $107.60, while lower range support is at $86.28. As a result, the stock is underperforming the rising market as it heads towards a 52-week low.

The weekly Stochastic is turning down as the shares gave a sell signal to the weekly market structure high (MSH) upon breaking $99.98. The weekly MSL buy trigger flushed as the shares declined below the $93.16 trigger towards the $86.28 lower rectangle range trendline.

The weekly 20-period Exponential Moving Average (EMA) continues to decline with resistance at $95.07, followed by the weekly 50-period MA with resistance at $98.11. The pullback supports the $86.28 swing low and the lower rectangle trendline, which sits at $83.57, $81.78, $79.33, and $77.13.

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