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CVS Health's PBM Selling Season Strong, Aetna Deal on Track
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On Aug 14, we issued an updated research report on CVS Health (CVS - Free Report) . While increasing demand for PBM (Pharmacy Benefit Management) and specialty pharmacy was a major growth driver for the stock, its dull retail performance over the last few quarters seems to have disappointed investors. The company carries a Zacks Rank #3 (Hold).
Shares of the company have outperformed the industry in the past three months. The stock has gained 9.2% compared with the 5.9% rally of its industry.
CVS Health ended the second quarter of 2018 on a promising note with earnings and revenues ahead of the respective Zacks Consensus Estimate. The year-over-year improvement in the top line was driven by a strong Pharmacy Services segment, benefiting from an upside in the specialty services. Also, year-over-year Retail/LTC comparisons were encouraging.
A strong 2019 PBM selling season is another positive. The company has completed more than 70% of its client renewals, roughly in line with the previous year’s count. The retention rate is currently higher than the rates witnessed over the past few years.
The company is currently moving toward the completion of the Aetna deal. Per CVS Health, this landmark acquisition of Aetna might change the Healthcare landscape in the United States. Investors are hopeful about CVS Health earning $750 million from near-term synergies out of Aetna deal post the transaction’s closure.
Despite a tough pricing pressure, CVS Health currently gains momentum through high levels of service and execution, competitive pricing and a unique integrated model, allowing the company to provide differentiated products and services generating savings, better health outcomes as well as convenience.
On the flip side, the company’s highly competitive retail pharmacy business is a big concern as it faces some stiff rivalry in the pharmacy segment. This is because availability of low-cost pharmacy options and other retail businesses continue to add pharmacy departments to the company’s portfolio. Particularly, discount retailers have made substantial inroads in gaining a major market share.
Key Picks
A few better-ranked stocks in the MedTech space are Inogen Inc (INGN - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and The Cooper Companies (COO - Free Report) . While Inogen has a Zacks Rank #2 (Buy), Integer and The Cooper Companies sport a Zacks Rank #1 (Strong Buy).
Inogen has an expected long-term earnings growth rate of 22.5% while the same for Integer Holdings and The Cooper Companies stands at 15% and 10.8%, respectively.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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CVS Health's PBM Selling Season Strong, Aetna Deal on Track
On Aug 14, we issued an updated research report on CVS Health (CVS - Free Report) . While increasing demand for PBM (Pharmacy Benefit Management) and specialty pharmacy was a major growth driver for the stock, its dull retail performance over the last few quarters seems to have disappointed investors. The company carries a Zacks Rank #3 (Hold).
Shares of the company have outperformed the industry in the past three months. The stock has gained 9.2% compared with the 5.9% rally of its industry.
CVS Health ended the second quarter of 2018 on a promising note with earnings and revenues ahead of the respective Zacks Consensus Estimate. The year-over-year improvement in the top line was driven by a strong Pharmacy Services segment, benefiting from an upside in the specialty services. Also, year-over-year Retail/LTC comparisons were encouraging.
CVS Health Corporation Price
CVS Health Corporation Price | CVS Health Corporation Quote
A strong 2019 PBM selling season is another positive. The company has completed more than 70% of its client renewals, roughly in line with the previous year’s count. The retention rate is currently higher than the rates witnessed over the past few years.
The company is currently moving toward the completion of the Aetna deal. Per CVS Health, this landmark acquisition of Aetna might change the Healthcare landscape in the United States. Investors are hopeful about CVS Health earning $750 million from near-term synergies out of Aetna deal post the transaction’s closure.
Despite a tough pricing pressure, CVS Health currently gains momentum through high levels of service and execution, competitive pricing and a unique integrated model, allowing the company to provide differentiated products and services generating savings, better health outcomes as well as convenience.
On the flip side, the company’s highly competitive retail pharmacy business is a big concern as it faces some stiff rivalry in the pharmacy segment. This is because availability of low-cost pharmacy options and other retail businesses continue to add pharmacy departments to the company’s portfolio. Particularly, discount retailers have made substantial inroads in gaining a major market share.
Key Picks
A few better-ranked stocks in the MedTech space are Inogen Inc (INGN - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and The Cooper Companies (COO - Free Report) . While Inogen has a Zacks Rank #2 (Buy), Integer and The Cooper Companies sport a Zacks Rank #1 (Strong Buy).
Inogen has an expected long-term earnings growth rate of 22.5% while the same for Integer Holdings and The Cooper Companies stands at 15% and 10.8%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>