On Sep 15, we issued an updated research report on CVS Health (CVS - Free Report) . Increasing demand for both Pharmacy Benefit Management (PBM) and specialty pharmacy is a steady key driver. The company currently carries a Zacks Rank #3 (Hold).
Over the past year, shares of CVS Health have outperformed its industry. The stock has declined 8.7% compared with 14.4% decline of the industry.
CVS Health ended the second quarter on a promising note with both earnings and revenues surpassing the respective Zacks Consensus Estimate. The year-over-year revenue rise was primarily driven by strong underlying core growth across all segments. Particularly, despite the unprecedented decline in utilization due to the pandemic, there was strong growth in the company’s recently-introduced Health Care Benefits segment, which benefited from significantly lower medical cost.
Further, amid the pandemic situation, retail prescription home delivery volume improved sequentially by more than 500% in the second quarter. In addition, within specialty pharmacy capabilities, there was continued growth. Coram infusion professionals have conducted more than 160,000 home visits year to date, collaborating with hospitals and providers to help transition eligible IV therapy patients to home-based care.
Amid the coronavirus crisis, CVS Health’s consumer centric digital strategy has become even more relevant as people are using technology more while they stay at home. So far in this period, the company achieved higher levels of engagement across its digital assets.
The company recently launched a digital platform to assist with registering COVID-19 patients for clinical trials as vaccines and therapeutic treatments are developed. This new service is a natural extension of CVS Health’s clinical and data analytics capabilities.
The company is also well-positioned to administer COVID-19 vaccines once they become available through its community presence, as well as on-site with Return Ready and long-term care solutions.
In terms of COVID-19 testing, the company continued to evolve HealthHUB footprint and offerings. Currently, it has 205 locations open across 22 states and is on track to open approximately 1500 hubs by the end of 2021.
On the flip side, the COVID-19 pandemic affected second-quarter revenues in the Retail/LTC (Long Term Care) and Pharmacy Services segments as new therapy prescriptions reduced due to lower provider visits as well as front store revenues due to shelter-in-place orders. Meanwhile, the LTC business is facing some industry-wide challenges. Reimbursement risk continues to be a dampener
In the second quarter, CVS Health registered moderate reduction in discretionary medical utilization, largely driven by COVID-19. Within Pharmacy Services, the company noted major impact of the pandemic in the second quarter. Within Retail/LTC, the company estimated COVID-19 impacted adjusted script growth by about 200 basis points.
Stocks to Consider
Some better-ranked stocks from the broader medical space are QIAGEN N.V. (QGEN - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Hologic, Inc. (HOLX - Free Report) .
QIAGEN’s long-term earnings-growth rate is estimated at 22.3%. It currently sports a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings-growth rate is estimated at 15.5%. It currently sports a Zacks Rank #1.
Hologic’s long-term earnings-growth rate is estimated at 15.5%. The company presently has a Zacks Rank #1.
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