CVS Health (NYSE:CVS), a pharmacy chain, reiterated its FY23 guidance with earnings in the range of $6.37 to $6.61 per share, while its adjusted earnings are likely to be between $8.50 and $8.70 per share. The company anticipates its FY23 adjusted earnings per share to be in the upper half of the guidance range.
In addition, CVS also reaffirmed its FY23 cash flow from operations guidance at the upper end of its $12.5 billion to $13.5 billion range. The company continues to expect FY24 diluted earnings of $7.26 per share, while its adjusted earnings are likely to be at least $8.50 per share. CVS’ cash flow from operations will likely be around $12.5 billion in FY24.
In the fourth quarter of FY23, CVS entered into a fixed-dollar accelerated stock buyback transaction, which became effective on January 3, 2024. The company anticipates its total Medicare Advantage (MA) membership to grow by at least 800,000 this year.
The company added, “During the annual enrollment period for 2024, our Individual MA and dual eligible special needs enrollment exceeded our expectations. Our stronger than expected 2024 MA enrollment is driven by factors including strong new sales and retention of existing Aetna MA members, with a higher than historical proportion of new sales coming from competitor MA plans.”
In addition, CVS also announced several leadership changes. The company’s SVP of Corporate Finance and interim CFO, Tom Cowhey, will be its next CFO, while CEO of Oak Street Health and interim lead of Health Care Delivery, Mike Pykosz, has been appointed as President of Health Care Delivery. These appointments will be effective immediately.
Is CVS a Buy or Sell?
Analysts remain bullish about CVS Health, with a Strong Buy consensus rating based on 15 Buys and four Holds. Over the past year, CVS has slid by more than 6%, and the average CVS price target of $90 implies an upside potential of 10.2% at current levels.
