Drugstore Chain CVS Health's Move to Simplify Drug Pricing Gives Peek Into FY24 Outlook
Portfolio Pulse from Vandana Singh
CVS Health Corp (NYSE:CVS) introduced CVS 'CostVantage', a new drug pricing model aimed at transparency by using a clear formula for drug costs and reimbursements. This initiative will start in the first half of 2024, initially aiding cash-paying consumers and later expanding to employer plans and potentially government coverage. CVS also launched 'CVS Healthspire' for its Health Services segment and reaffirmed its FY23 guidance with adjusted EPS of $8.50-$8.70. For FY24, CVS projects revenues of at least $366 billion and adjusted EPS of at least $8.50, with an adjusted operating income of at least $17.2 billion and cash flow from operations of at least $12.5 billion. CVS shares rose 1.34% in premarket trading.
December 05, 2023 | 1:32 pm
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CVS Health Corp announced a new transparent drug pricing model, CVS 'CostVantage', and a new brand for its Health Services segment, 'CVS Healthspire'. The company also provided positive FY24 revenue and EPS guidance, exceeding analyst consensus.
The introduction of CVS 'CostVantage' is likely to be viewed positively by investors due to its focus on transparency, which is a growing demand in the healthcare sector. The reaffirmation of FY23 guidance and the bullish FY24 outlook, with revenue and EPS projections above consensus, are strong indicators of the company's confidence in its financial health and growth prospects. The premarket stock price increase suggests a positive short-term impact.
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RELEVANCE 100