Lively Updates
CVS Health's shares rally following Q1 earnings that surpass expectations
Highlights:
- CVS Health's shares soared by a staggering 7% following its stellar first-quarter results.
- The pharmacy and health insurance titan outperformed expectations, with revenue jumping 7% to $94.59 billion and adjusted earnings per share (EPS) rocketing over 70% to $2.25.
- Despite the impressive showing, CVS trimmed its EPS guidance range and lowered its EPS forecast due to certain one-time costs.
- However, the healthcare powerhouse boosted its adjusted EPS projection, citing robust performance across all business units.
CVS Health, fondly referred to as CVS, witnessed a 7% surge in its share price on Thursday, applauding the pharmacy and health insurance giant's sensational first-quarter results.1
Revenue and adjusted EPS figures shattered expectations, growing 7% and over 70% year-over-year to $94.59 billion and $2.25, respectively. Each metric sailed past the analyst consensus compiled by Visible Alpha.
The company trimmed its EPS guidance range from $4.58 to $4.83 to $4.23 to $4.43 to accommodate one-time costs. Yet, CVS substantially raised its adjusted EPS projection to $6.00 to $6.20, from the previous range of $5.75 to $6.00.
CVS Health disclosed that it revised its outlook to reflect exceptional performance across every business division, while maintaining a cautious view regarding the year's remaining challenges. These include escalating cost trends and potential macroeconomic headwinds.
Last month, the company hinted it might easily meet or surpass its adjusted EPS range and appointed a new CFO, Brian Newman.
In the year to date, CVS Health shares have skyrocketed by nearly 60% and touched their mintiest peak since April 2024.
UPDATE-This article has been updated with the most current share price information.
Expert Insights:
CVS Health's confidence in its engine room comes from the outstanding performance of its Medicare Advantage business segment and the positive impact of improved star ratings on reimbursements. Simultaneously, the company has increased its GAAP EPS forecast due to implementation costs, office real estate reconfiguration expenses, Omnicare litigation charges, and uncertainties about persisting cost trends and online risks.1 However, these expenses are counterbalanced by optimism in operational execution and improved cash flow projections.2 Despite these encouraging signs, CEO David Joyner emphasizes the continued importance of integrated healthcare services in driving value and urges a cautious outlook in the face of enduring industry pressures.3
CVS Health's share price surged by 7% on Thursday, reflecting the pharmacy and health insurance giant's impressive first-quarter results. The revenue and adjusted EPS figures exceeded expectations, growing 7% and over 70% respectively. However, CVS trimmed its EPS guidance range to accommodate one-time costs. Despite this, the company substantially raised its adjusted EPS projection, citing robust performance across all business units.
Last month, CVS Health appointed a new CFO, Brian Newman, and hinted it might easily meet or surpass its adjusted EPS range. In the year to date, CVS Health shares have skyrocketed by nearly 60% and touched their highest peak since April 2024.
The company's confidence comes from the outstanding performance of its Medicare Advantage business segment and the positive impact of improved star ratings on reimbursements. Simultaneously, CVS has increased its GAAP EPS forecast due to implementation costs, office real estate reconfiguration expenses, Omnicare litigation charges, and uncertainties about persisting cost trends and online risks. However, these expenses are counterbalanced by optimism in operational execution and improved cash flow projections.
CEO David Joyner emphasizes the continued importance of integrated healthcare services in driving value and urges a cautious outlook in the face of enduring industry pressures. This cautious outlook is necessitated by escalating cost trends and potential macroeconomic headwinds. Science and health-and-wellness sectors, as well as finance and business markets, will closely monitor CVS Health's performance in the remaining quarters of the year.
