Ben Winck Aug. 7, 2019, 09:03 AM
·
CVS traded as much
as 5.6% higher on Wednesday after beating second-quarter earnings expectations
and raising its yearly profit forecast for the second time in 2019.
·
The earnings beat arrives as the
company plans to open about 50 HealthHUB stores by
the end of the year. The new venture represents the direction CVS hopes to go
in after acquiring health insurer Aetna for
$70 billion in November.
CVS rose
as much as 5.6% in early Wednesday trading after beating second-quarter
expectations and continuing the integration of health insurer Aetna into its
portfolio.
The
company also raised its full-year profit guidance for the second time in 2019.
The positive report assured investors the company remains financially stable
after acquiring
Aetna for $70 billion in November.
"While
still early, we remain confident that we will be able to realize the potential
of our innovative and powerful new business model to deliver enhanced value to
our clients and the consumers we serve," CVS CEO Larry Merlo said in the
report.
Here are the key numbers:
Revenue: $63.43 billion, versus
the $62.65 billion estimate
Earnings per share: $1.89,
versus the $1.69 estimate
2019 earnings per share forecast: between
$6.89 to $7.00, versus the $6.84 estimate
The
company plans to open 1,500 locations for its new HealthHUB stores by the end
of 2021, with about 50 opening by the end of the year. The new venture marks a
turning point for the company's Aetna integration, as HealthHUB stores focus on
services including wellness and care for chronic diseases like diabetes. The
first three stores opened in
Houston in early 2019.
CVS's
earnings beat follows a Tuesday announcement from rival Walgreens that it will
close 200 stores in the US to "increase operations
efficiencies." The announcement, coupled with Walgreens' April
earnings miss, signals that CVS may face more pressure from Amazon than
traditional pharmacies as the
e-commerce company expands its PillPack pharmacy business.
CVS
closed Tuesday at $54.09 per share, down about 17% year-to-date.
The
company has 18 "buy" ratings, 10 "hold" ratings, and no
"sell" ratings from analysts, and a price target of $68.14, according
to Bloomberg data.
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