CVS Health(US:CVS) Kiplingerยท2024-05-01 16:20Core Viewpoint - CVS Health's stock dropped over 18% following the announcement of weaker-than-expected earnings and revenue for Q1, along with a reduced full-year outlook [1][4]. Financial Performance - For the three months ending March 31, CVS reported revenue of $88.4 billion, a 3.7% increase year-over-year, driven by a 24.6% growth in the Health Care Benefits segment, totaling $32.2 billion [1]. - Earnings per share (EPS) fell 40.5% year-over-year to $1.31, primarily due to declining operating income in the Health Care Benefits business linked to rising medical costs in Medicare Advantage plans [1][4]. Analyst Expectations - The quarterly results significantly missed analysts' expectations, with Wall Street forecasting revenue of $89.2 billion and EPS of $1.69 [3]. - Despite the earnings setback, analysts remain bullish on CVS, with a consensus target price of $87.96, indicating an upside of over 56% from current levels, and a consensus recommendation of "Buy" [6]. Revised Outlook - CVS has lowered its full-year EPS guidance to at least $7.00, down from a previous estimate of at least $8.30, and reduced its cash flow from operations forecast to at least $10.5 billion, down from at least $12 billion [4]. Management's Statement - CVS CEO Karen Lynch expressed confidence in the company's long-term earnings potential and stated that the current challenges do not diminish their opportunities [3][5].