CVS Health and Wall Street share views on the growth potential of the pharmacy chain as the impact of COVID-19 on the company begins to wane.
CFO Sean Gertin said Wednesday morning that analysts’ average expectations for earnings of $ 8.20 per share in 2022 are in line with CVS Health’s original forecast for the new year, promising to provide more details at the company’s annual investor meeting on December 9.
The stock, which has already surged more than 30% this year, jumped again in morning trading after Guertin commented on a call to analysts to discuss third-quarter results.
The CEO noted that the average forecast for 2022 will represent an increase of about 8% from the company’s baseline forecast for 2021 of $ 7.55 per share. This figure does not take into account capital gains or factors such as the pay increase that the company announced earlier this year.
CVS Health operates a pharmacy chain with over 10,000 retail outlets. He also sells health insurance through his Aetna division and manages pharmacy benefits for large clients such as employers and insurers.
Customers began to write more prescriptions – a core element of CVS Health’s business – and return to its stores, in part due to the need to get COVID-19 vaccinations or tests.
Gertin said the company expects demand for vaccines and tests to begin to decline. Vaccines shipped in the third quarter fell to 11 million from 17 million in the second quarter.
The CFO added that the government’s recent decision to allow children between the ages of 5 and 11 to receive preventive vaccinations will have only “modest” impact.
CVS Health expects the number of COVID-19 vaccines and the number of vaccines supplied to its stores to drop by half next year compared to what was delivered this year. Something that will disrupt CVS Health’s pharmacy business. But that could be balanced with fewer pandemic-related claims and lower costs for the insurer.
In the recently concluded third quarter, CVS Health performed better than expected, with net income up 30% to $ 1.59 billion.
The company’s adjusted earnings were $ 1.97 per share. That’s 10% higher than the average analyst forecast of $ 1.79 per share, according to FactSet. Total revenue rose 10% to $ 73.8 billion.
Revenue from the company’s largest business, Pharmacy Benefit Management, rose 9% to $ 39.05 billion, driven by an increase in pharmacy calls and higher sales of expensive specialty drugs.
Aetna’s insurance business, reaching over 23 million people, increased its sales by nearly 10%.
Traditional pharmacy sales also jumped 10% in the third quarter compared to last year, when the pandemic affected consumer purchasing power more.
Shares of CVS Health Corp., based in Woonsocket, Rhode Island, rose more than 4% to $ 95.51 amid downturns in broader markets during midday trading.