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Why is Cvs Health Corp (CVS) Stock down?
We've noticed a 7.37% decline in Cvs Health Corp (CVS) stock during the 2024-11-07 trading session. While this could be attributed to normal volatility or various internal and external factors, please be aware that we are actively monitoring the situation, and we'll provide timely updates as soon as possible!
01 May, 2024:
CVS Health Corp (CVS) stock plunged by 16.84% following the release of disappointing first-quarter earnings and revised guidance for the year. The company's diversified portfolio in pharmacy and health insurance faced challenges, leading to a significant market reaction.
- Revenue Analysis: Total revenue for CVS Health Corp increased by 3.7% year over year to $88.4 billion, falling short of analyst expectations. While revenue from the pharmacy and consumer wellness segment saw a modest increase of 2.9% to $28.7 billion, revenue from health services, including the pharmacy benefit manager, declined by 9.7% to $40.3 billion. Notably, the healthcare benefits segment experienced a 24.6% revenue increase to $32.2 billion. However, escalating costs due to heightened Medicare utilization and declining Medicare Advantage star ratings eroded profitability.
- Medicare Challenges: The surge in Medicare costs and a decline in star ratings significantly impacted CVS's healthcare benefits segment. The medical benefit ratio rose from 84.6% to 90.4%, resulting in a substantial decrease in adjusted operating income. Adjusted earnings per share plummeted from $2.20 in Q1 2023 to $1.31, significantly missing analysts' expectations.
- Guidance Adjustment: Management revised its adjusted earnings per share forecast for the full year from at least $8.30 to at least $7, well below analysts' consensus forecast of $8.28. This downward revision, coupled with trimmed revenue guidance, intensified market concerns about the company's profitability and bottom-line weakness.
20 Oct, 2023:
CVS Health Corporation Stock (CVS) dropped by 2.21% from $70.61 to $69.05 in the trading on Friday October 20, 2023. The reason why CVS stock down today is due to medicine removal. The pharmacy chain said it would remove some over-the-counter allergy and cold medicines after a U.S. Food and Drug Administration committee said a main ingredient, phenylephrine, was ineffective when taken orally.
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