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CVS Health (CVS) PBM Strengthens, Aetna Deal Shows Promise
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On Sep 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 13.6% compared with the 9.7% rally of its industry.
In recent quarters, CVS Health consistently registered a strong year-over-year improvement in the top line, driven by a strong Pharmacy Services segment, which in turn, benefited from an upside in the specialty services. Also, year-over-year Retail/LTC comparisons were encouraging.
A solid 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 completing the Aetna deal. Per CVS Health, this landmark acquisition of Aetna might change the entire Healthcare landscape in the United States. Investors are hopeful of CVS Health earning $750 million from near-term synergies post the transaction’s closure.
Despite immense pricing pressure, CVS Health currently gains momentum through high quality service and execution, a competitive pricing as well as a unique integrated model. This in turn, allows 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 aggressive 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 some substantial inroads into gaining a major market share.
Key Picks
A few better-ranked stocks in the Medical Instruments space are Intuitive Surgical (ISRG - Free Report) , RTI Surgical and Masimo Corporation (MASI - Free Report) .
RTI Surgical’s earnings growth rate for the current quarter is an impressive 100%. The stock has a Zacks Rank of 2.
Masimo’s long-term earnings growth rate is projected at 14.8%. The stock currently carries a Zacks Rank #2 (Buy).
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
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CVS Health (CVS) PBM Strengthens, Aetna Deal Shows Promise
On Sep 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 13.6% compared with the 9.7% rally of its industry.
In recent quarters, CVS Health consistently registered a strong year-over-year improvement in the top line, driven by a strong Pharmacy Services segment, which in turn, benefited from an upside in the specialty services. Also, year-over-year Retail/LTC comparisons were encouraging.
A solid 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 completing the Aetna deal. Per CVS Health, this landmark acquisition of Aetna might change the entire Healthcare landscape in the United States. Investors are hopeful of CVS Health earning $750 million from near-term synergies post the transaction’s closure.
Despite immense pricing pressure, CVS Health currently gains momentum through high quality service and execution, a competitive pricing as well as a unique integrated model. This in turn, allows 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 aggressive 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 some substantial inroads into gaining a major market share.
Key Picks
A few better-ranked stocks in the Medical Instruments space are Intuitive Surgical (ISRG - Free Report) , RTI Surgical and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RTI Surgical’s earnings growth rate for the current quarter is an impressive 100%. The stock has a Zacks Rank of 2.
Masimo’s long-term earnings growth rate is projected at 14.8%. The stock currently carries a Zacks Rank #2 (Buy).
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
See Zacks Best EV Stock Free >>