CVS HEALTH Downgraded by Evercore ISI and Faces Potential Risks in 2024
January 8, 2023
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CVS HEALTH ($NYSE:CVS) is one of the leading pharmacy retailers and health care companies in the United States, providing access to prescription drugs, medical advice, and other health care services. On Tuesday, however, Evercore ISI downgraded CVS Health Corporation’s shares to ‘In Line’ from ‘Perform’, causing the pre-market value to drop by ~1%. The downgrade was due to potential risks CVS could face in 2024. Anderson and her team of analysts highlighted that CVS could potentially lose its PBM (pharmacy benefit manager) contract to Express Scripts, a division of Cigna, by Centene which holds nearly 20M members. Furthermore, they noted that the upcoming annual enrollment period would be highly competitive and that the CMS Star rating had decreased for Aetna National Medicare Advantage plan.
CVS Health has been making investments to expand its offerings and increase profits, such as opening new stores, launching a new mobile app, and acquiring other companies. Despite these efforts, the company may still face significant risks due to the competitive nature of the pharmacy and health care industry. The company needs to continue to make smart investments and focus on expanding its offerings in order to remain competitive and profitable. It remains to be seen how CVS HEALTH will fare in the upcoming year, but the company must be prepared for any potential risks it may face.
Share Price
The media coverage of this news has been mostly negative. On Tuesday, CVS Health opened at $91.7 and closed at $92.9, down by 0.3% from last closing price of 93.2. This minor decline could be an indicator of the looming risks that the company may face in the near future. It is difficult to predict what will happen in 2024, but CVS Health must take steps to protect the company and its investors. The company needs to evaluate potential risks and find ways to address them. They must also work to improve their reputation with the media and investors. This could involve better communication, better customer service, and a focus on creating value for shareholders. At the same time, CVS Health must continue to focus on developing and refining their products and services. This could involve investing in research and development, expanding into new markets, and increasing their presence in existing markets.
Additionally, CVS Health must also look for ways to increase efficiency, reduce costs, and streamline operations. By taking a proactive approach to addressing potential risks and focusing on creating value for shareholders, CVS Health should be able to remain competitive in the coming years. While the downgrade by Evercore ISI was not ideal, it can serve as an impetus for CVS Health to take a closer look at their operations and make meaningful improvements. If they can do this, then they should be able to weather any potential risks that may arise in 2024. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cvs Health. More…
| Total Revenues | Net Income | Net Margin |
| 315.23k | 3.15k | 3.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cvs Health. More…
| Operations | Investing | Financing |
| 22.13k | -6.37k | -11.24k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cvs Health. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 231.21k | 160.2k | 53.75 |
Key Ratios Snapshot
Some of the financial key ratios for Cvs Health are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 8.9% | 9.9% | 2.0% |
| FCF Margin | ROE | ROA |
| 6.2% | 5.5% | 1.7% |
VI Analysis
CVS Health is a medium risk investment according to the VI Risk Rating. This rating takes into account both financial and business aspects of the company’s fundamentals, and provides an overall assessment of its long-term potential. The VI App has identified three risk warnings for CVS Health, located in its income sheet, balance sheet and non-financial areas. These warnings are a sign of potential issues that should be carefully considered before making an investment. Income sheet risks may refer to changes in sales, costs or other factors that affect the company’s profitability. Balance sheet risks indicate potential liquidity issues, debt levels or other factors that could influence an investor’s return. Non-financial risks can be related to the company’s competitive environment, regulatory changes or other external factors. Overall, investors should take the time to properly evaluate any potential investment, especially when there are risk warnings present. By carefully assessing CVS Health’s financials, business operations, competitive environment, and other external risks, investors can make informed decisions on whether this is a suitable investment for their portfolio. More…
VI Peers
The competition between CVS Health Corp and its competitors is fierce. Each company is striving to be the top provider of healthcare services and products. CVS Health Corp is the largest provider of pharmacy services in the United States. Marpai Inc is a close second. Molina Healthcare Inc and Humana Inc are also major competitors in the healthcare industry.
– Marpai Inc ($NASDAQ:MRAI)
Marpai Inc is a publicly traded company with a market capitalization of 20.89 million as of 2022. The company has a return on equity of -64.66%. Marpai Inc is engaged in the business of developing and marketing products and services for the energy industry. The company’s products and services include oil and gas exploration, production, and development; oilfield services; and petrochemical refining.
– Molina Healthcare Inc ($NYSE:MOH)
Molina Healthcare Inc is a health care company that provides Medicaid-related solutions for low-income families and individuals. As of 2022, the company had a market capitalization of 20.52 billion dollars and a return on equity of 24.89%. The company’s main business is providing managed care services under the Medicaid and Medicare programs. In addition to this, the company also provides other health services such as behavioral health, long-term care, and pharmacy services.
– Humana Inc ($NYSE:HUM)
Humana Inc is a healthcare company that offers a wide range of health and wellness products and services. The company has a market cap of 63.3B as of 2022 and a return on equity of 17.4%. Humana’s products and services include medical and prescription drug coverage, dental and vision coverage, and wellness and fitness programs. The company also offers a variety of health and wellness products and services for individuals, families, and businesses.
Summary
Investors interested in CVS Health should be aware of the recent downgrade by Evercore ISI and potential risks that may arise in 2024. The media coverage of the company has been mostly negative, and investors should be cautious when considering investing in the company. It is important to consider the current financial position, future growth prospects, and risk associated with the company before investing. Investors should also keep an eye on any changes in regulations or other industry dynamics that could affect CVS Health’s performance.
In addition, investors should monitor management’s strategy and execution, as well as its ability to compete with other companies in the healthcare sector.
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