CVS Health Corporation (CVS) is scheduled to report fourth-quarter 2024 results on Feb. 12, before the opening bell.See the Zacks Earnings Calendar to stay ahead of market-making news.In the last reported quarter, the company’s adjusted earnings of $1.09 exceeded the Zacks Consensus Estimate by 1.87%. CVS Health beat estimates in three of the trailing four quarters and missed in one, the average negative surprise being 2.50%.The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $97.06 billio ...

Core Viewpoint - CVS Health is a significant player in the healthcare sector, combining pharmacy retail, pharmacy benefits management, and health insurance services through its acquisition of Aetna in 2018 [1] Group 1: Stock Performance and Valuation - Despite its strong position in the healthcare industry, CVS stock has lost nearly 50% of its value over the past three years [2] - The current low valuation may prompt investors to consider whether it is an opportune time to invest, especially ahead of the year-end earnings report scheduled for February 12 [3] Group 2: Earnings and Management Changes - CVS has underperformed in recent quarters, consistently missing analyst expectations and lowering its guidance multiple times [5] - The new CEO, David Joyner, took over in October, and the upcoming earnings report will be the first full quarter under his leadership, making it crucial for investors to assess his long-term strategy [7] Group 3: Strategic Considerations - Investors should focus on the CEO's vision and potential strategic changes, such as reducing the dividend, store count, or selling assets to create a leaner operating model [8] - CVS reported sales of nearly $370 billion over the past four quarters, but profits were just over $5 billion, indicating a need for significant operational improvements [8] Group 4: Investment Approach - Given the current uncertainties surrounding CVS, it is advised that investors adopt a wait-and-see approach rather than rushing to buy shares before the earnings report [10][11]

Core Viewpoint - CVS Health has shown significant stock performance recently, with a +27.9% return over the past month, outperforming the S&P 500 composite's +1.1% and the Zacks Retail - Pharmacies and Drug Stores industry's +24.9% [2] Earnings Estimates - CVS Health is expected to report earnings of $0.89 per share for the current quarter, reflecting a year-over-year decline of -58%. The consensus estimate for the current fiscal year is $5.18, indicating a -40.7% change year-over-year [5] - For the next fiscal year, the consensus earnings estimate is $5.97, which represents a +15.3% increase compared to the previous year [6] - The Zacks Rank for CVS Health is 5 (Strong Sell), indicating a negative outlook based on recent earnings estimate revisions [7] Revenue Growth Forecast - The consensus sales estimate for CVS Health for the current quarter is $97.06 billion, showing a year-over-year increase of +3.5%. For the current and next fiscal years, the sales estimates are $372.16 billion and $386.77 billion, reflecting +4% and +3.9% changes, respectively [9] Last Reported Results - In the last reported quarter, CVS Health achieved revenues of $95.43 billion, a +6.3% increase year-over-year. The EPS was $1.09, down from $2.21 a year ago. The revenue exceeded the Zacks Consensus Estimate by +2.75%, and the EPS surprise was +1.87% [11] Valuation - CVS Health is graded A in the Zacks Value Style Score, indicating that it is trading at a discount compared to its peers [15]

Core Insights - CVS Health has launched a new app aimed at enhancing the consumer health care experience by providing convenience, savings, and ease of access to health services [1][2] Group 1: App Features - The CVS Health app consolidates various health management tools into a single platform, allowing users to manage prescriptions, immunizations, and health spending [5][6] - The app includes features such as personalized updates, a redesigned home screen with a health "to do" list, and AI-powered search capabilities [6][5] - Users can manage prescriptions for their entire family, schedule immunizations easily, and access health spending details for eligible members [6][5] Group 2: Consumer Engagement - CVS Health aims to serve its 60 million digital customers by continuously innovating and enhancing app capabilities [5] - The app will provide personalized recommendations and educational content for patients managing chronic health conditions [6] - A new conversational AI chat feature will allow patients to check medication refills and order statuses [6] Group 3: Company Overview - CVS Health is a leading health solutions company with a workforce of over 300,000, including more than 40,000 health professionals [7] - The company focuses on improving access to health care, lowering costs, and being a trusted partner in health management [7]

Pharmacy Industry Overview - Investing in pharmacy chains has been challenging recently, with Rite Aid filing for bankruptcy and larger rivals like Walgreens Boots Alliance and CVS Health facing uncertain futures [1] - Both companies have undergone management changes and are implementing turnaround strategies, creating uncertainty for investors [1] Walgreens Boots Alliance - Walgreens has lost 77% of its value over the past three years [2] - New CEO Tim Wentworth has implemented cost-cutting measures, including reducing the dividend and planning to close 1,200 stores [2] - The stock may have bottomed out, showing signs of recovery after beating revenue and adjusted EPS expectations in Q1 2025, with sales of $39.5 billion surpassing the $37.4 billion consensus estimate [3] - The company's 2025 goals include optimizing its footprint, controlling costs, and improving cash flow, which could strengthen its financial position [4] CVS Health - CVS stock has declined nearly 50% over the past three years, but its diversified business has helped it remain profitable despite rising medical costs [5] - New CEO David Joyner, with 37 years of healthcare and pharmacy benefits management experience, aims to improve stability and predictability [6] - CVS reported an operating profit of $832 million in Q3 2024, a significant drop from $3.7 billion a year earlier, but strong growth in its health services segment mitigated further declines [7] - The company's diversification provides flexibility, including potential spinoffs of underperforming business units to focus on high-growth areas [8] Comparison and Outlook - Walgreens may appeal to contrarian investors due to its low valuation, but it risks becoming a value trap as its pharmacy business struggles with increasing online competition [9] - CVS appears to be the better investment option, as it remains profitable and benefits from a more diversified business model, offering greater long-term potential despite ongoing uncertainties [10]

Core Insights - CVS Health Foundation announced a $4 million grant initiative over five years to support organizations focused on improving health care access for older adults in various U.S. cities [1][2] - The initiative aims to address the growing needs of the aging population, with projections indicating that by 2034, individuals over 64 will outnumber those under 18 in the U.S. [2] Group 1: Funding and Initiatives - Each of the four organizations receiving funding will receive $1 million to enhance health care access and resources for older adults with specific health conditions [1] - The Atlanta Regional Collaborative for Health Improvement will enhance its Community Resource Hub to connect older adults with essential health care and resources [3] - The Center for Better Aging will improve its coordinated care model to address chronic conditions in Chicago's South Side and establish a data system to track health outcomes [5][6] - EngageWell will expand its Care Your Way initiative to improve telemedicine access and support for senior citizens in New York City [7][8] - Palm Health Foundation will create a Healthier Aging Initiative to support caregivers over 60, focusing on their health and wellness needs [9][10] Group 2: Organizational Impact - The Atlanta Regional Collaborative for Health Improvement emphasizes the importance of collaboration to improve health outcomes for underserved elders [4] - The Center for Better Aging aims to advance quality and equality in health care for underserved communities, addressing health disparities affecting older adults [6] - EngageWell focuses on addressing barriers faced by low-income elders of color in accessing quality healthcare, utilizing technology and community health workers [8] - Palm Health Foundation's initiative is community-driven, centering on the voices of caregivers to improve their quality of life [10]

Group 1 - CVS Health was one of the worst performing stocks in the S&P 500 in 2024, with a full-year return showing a decline of approximately 40 percent [1]

Group 1: Company Performance - CVS Health closed at $51.96, reflecting a -0.35% change from the previous day, underperforming the S&P 500's daily loss of 0.21% [1] - Over the past month, CVS Health shares have appreciated by 15.15%, outperforming the Retail-Wholesale sector's loss of 2.84% and the S&P 500's loss of 1.56% [1] Group 2: Upcoming Financial Results - CVS Health is set to announce its earnings on February 12, 2025, with an anticipated EPS of $0.94, representing a 55.66% decline compared to the same quarter last year [2] - The consensus estimate forecasts revenue of $97.27 billion, indicating a 3.69% growth compared to the corresponding quarter of the prior year [2] Group 3: Analyst Forecasts and Rankings - Recent revisions to analyst forecasts for CVS Health are important as they reflect short-term business trends, with positive changes indicating a favorable outlook on the company's health and profitability [3] - The Zacks Rank system, which assesses estimated changes, currently ranks CVS Health as 5 (Strong Sell), with the Zacks Consensus EPS estimate moving 2.08% lower in the past month [5] Group 4: Valuation Metrics - CVS Health has a Forward P/E ratio of 8.56, which is a premium compared to its industry's Forward P/E of 7.89 [6] - The company also has a PEG ratio of 0.78, aligning with the average PEG ratio of the Retail - Pharmacies and Drug Stores industry [7] Group 5: Industry Context - The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector, holding a Zacks Industry Rank of 235, placing it in the bottom 7% of over 250 industries [8]

CVS Health - CVS Health is a dominant player in the US healthcare industry, known for its CVS Pharmacy locations, CVS Caremark, and Aetna health plans [2] - The company faced challenges in 2024, including lower demand for COVID-related products and rising costs tied to its Medicare Advantage plans [2] - A recent government proposal to increase MA payments in 2026 has renewed optimism, helping shares climb nearly 15% year-to-date [17] - CVS offers a 5.16% dividend yield and has a P/E ratio of 13.08, making it attractive for income-focused investors [14] - Analysts maintain a Moderate Buy rating and project nearly 33% upside to the consensus price target [10] Ford Motor Co - Ford Motor Co has faced challenges, with its stock falling nearly 16% over the past year due to rising recall and warranty costs and continued losses in its EV segment [3] - The company has a dividend yield of 6.13% and an annual dividend of $0.60, with an annualized 3-year dividend growth of 81.71% [7] - Management projects better EV margins by 2025 through cost improvements [7] - Valuation metrics highlight Ford's appeal, with a P/E of 11.07 and a forward P/E of 5.74 [18] - Analysts assign a Reduce rating but the consensus price target of $11.83 implies an impressive upside from current levels [15] Devon Energy - Devon Energy has surged over 12% this year, breaking out of a long-term downtrend and clearing a critical resistance level [5][13] - The company offers a dividend yield of 2.36% with an annual dividend of $0.88 and an annualized 3-year dividend growth of 25.99% [16] - Devon's forward yield stands at 4.13% and could rise significantly if oil prices continue to climb [13] - As one of the US's largest independent oil and gas producers, Devon operates in highly productive regions like the Delaware Basin [16] Market Overview - The energy sector has started 2025 strong, with the Energy Select Sector SPDR Fund ETF up 5.36% year-to-date [5] - The S&P 500 and other major indices are down year-to-date, led by sharp declines in tech heavyweights like NVIDIA, which has fallen 13% from its 52-week high [8] - Market sentiment has been dampened by a hot December jobs report, reigniting fears of prolonged higher interest rates [8]

Stock Performance - Shares of UnitedHealth Group Incorporated (UNH), Humana Inc (HUM), and CVS Health Corporation (CVS) grew by 3 9%, 6 8%, and 7 3%, respectively, following the Biden administration's proposal to increase payments to Medicare Advantage (MA) plans [1] - The proposed payment increase significantly exceeded market expectations, signaling a potential windfall for these companies [1] Earnings Growth Expectations - Humana's next-year EPS growth rate is expected at 3 3% with a Zacks Rank 2 (Buy) [2] - UnitedHealth's next-year EPS growth rate is expected at 8% with a Zacks Rank 3 (Hold) [2] - CVS Health's next-year EPS growth rate is expected at 16 7% but has a Zacks Rank 5 (Strong Sell) [2] Medicare Advantage Market Dynamics - Government payments to MA plans are projected to rise by an average of 4 33%, an increase of more than $21 billion from 2025 to 2026 [4] - Excluding changes in patient risk scores, the effective growth rate is expected to be 2 23% [4] - UnitedHealth, Humana, and CVS Health collectively account for nearly 60% of the MA market [6] Industry Challenges - Physicians treating Medicare patients face their fifth consecutive year of payment cuts, leading to frustration over perceived preferential treatment for insurers [5] - The American Medical Association (AMA) is urging Congress to align physician payment rates with the rising cost of care [5] - MA remains under scrutiny from politicians on both sides for care denials and alleged overpayments, adding an element of uncertainty [7] Financial Impact - The finalized 2025 payment rates, announced in April, amounted to a slight reduction when adjusted for risk scores [6] - The newly proposed rates, coupled with membership growth, are poised to bolster the financial performance of MA plan sellers [6] - The Fed is likely to spend $9 2 trillion over the next 10 years on MA payments to plans [7] Conclusion - With the proposed payment increase and growing membership, Medicare Advantage sellers like UnitedHealth, Humana, and CVS Health are positioned for near-term growth [3] - Ongoing scrutiny and pushback from physicians could influence the sector's longer-term trajectory [3]