CVS Health (CVS) stock is spiraling Friday after the pharmacy chain and health benefits provider announced the appointment of a new CEO.
Effective October 17, David Joyner took over as president and CEO of CVS Health, replacing Karen Lynch, who had been in the position since February 2021. Joyner has 37 years of experience in the healthcare and pharmacy benefit management industries, most recently serving as executive vice president of CVS Health and president of CVS Caremark.
"There is no greater honor than to lead a company whose mission and purpose are completely focused on improving health," Joyner said in a statement. "I came back to CVS Health in 2023 because I believed I could give more to the company, and I take this opportunity today for the same reason. I am proud to continue working side by side with our 300,000 colleagues who are building a world of health around every consumer."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The news comes less than three weeks after reports surfaced that CVS was conducting a strategic review of its business and had hired bankers to assist in exploring options, including a possible breakup of its retail and insurance units.
CVS Health's preliminary Q3 results fall short
In the press release, CVS also provided preliminary guidance for its third quarter, calling for earnings per share in the range of $1.05 to $1.10.
The forecast falls well below analysts' expectations for third-quarter earnings of $1.70 per share, according to Yahoo Finance.
"In light of continued elevated medical cost pressures in the Health Care Benefits segment, investors should no longer rely on the Company's previous guidance provided on its second-quarter 2024 earnings call on August 7, 2024," CVS added.
Is CVS stock a buy, sell or hold?
CVS Health has had a rough year on the price charts, as well. Shares have fallen more than 26% since the start of 2024, but Wall Street remains bullish on the healthcare stock.
According to S&P Global Market Intelligence, the average analyst target price for CVS is $70.10, representing implied upside of 20% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Argus Research is one of those with a Buy rating the large-cap stock and a $75 price target.
The shares trade at an attractive valuation and CVS boasts a healthy 4.2% dividend yield which seems sustainable, wrote Argus Research analyst Christopher Graja in an October 2 note. However, the analyst admitted that he's "disappointed with the recent performance of the Health Care Benefits business" and is "not sure that our Buy recommendation can withstand another guidance cut or a deterioration in credit-quality metrics."
Related content
-
Alaska Airlines Charts First Non-Stop Transatlantic Route: Seattle to RomeAlaska Airlines announces its inaugural nonstop flight to Europe, connecting Seattle to Rome starting May 2026, marking a significant milestone in the airline's international expansion.
-
Mint Mobile Is Offering $440 Off Samsung and Google Phones Plus Half Off Unlimited Plans for Two YearsReady to upgrade your phone? If you switch to Mint Mobile, you can get $440 off that upgrade and lock in two years of ultra low prices on your phone plan.
-
What the HECM? Combine It With a QLAC and See What HappensCombining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden RisksPotential investors need to understand the crucial distinction between a REIT's option to buy a Delaware statutory trust's property and its obligation.
-
I'm an Insurance Expert: Yes, You Need Life Insurance Even if the Kids Are Grown and the House Is Paid OffLife insurance isn't about you. It's about providing for loved ones and covering expenses after you're gone. Here are five key reasons to have it.
-
Stock Market Today: Tesla Drags on Stocks Amid Musk-Trump FeudSentiment has soured between President Trump and his once-loyal ally, Tesla CEO Elon Musk.
-
My Professional Advice: When It Comes to Money, You Do YouThis is how embracing the 'letting others be' and 'learning to surrender' mindsets can improve your relationship with money.
-
Direct Indexing Expert Explains How It Can Be a Smarter Way to InvestDirect indexing provides a more efficient approach to investing that can boost after-tax returns, but is it right for you?
-
Stock Market Today: Stocks Brush Off Weak Jobs DataThe yields on the 2-year and 10-year Treasury notes fell sharply after a pair of weak economic reports.
-
What Does It Really Take to Retire Rich?With enough time and consistency, even an average income can lead to a wealthy retirement.
