CVS shares fell 8 percent Feb. 20 after the company reported a lower-than-expected earnings forecast as it works to integrate health insurer Aetna and uncertainty over rebates weigh on its pharmacy benefit unit, according to CNBC. It was CVS' worst trading day since November 2016.
In November 2017, CVS closed its acquisition of Aetna, which was touted as a transformational moment in healthcare and the company's 56-year history.
However, the disappointing forecast given by CVS for the year implies there may be more challenges to integrating the two companies. It also highlights the pressures weighing on CVS' core businesses, according to the report.
For the full year of 2019, CVS forecasts earnings per share from continuing operations in the range of $4.88 to $5.08. The retail pharmacy giant expects adjusted earnings of $6.68 to $6.88 per share, well below the $7.41 per share analysts polled by Refinitiv expected. The company also predicted adjusted operating income declines in two of its three business units, long-term care and pharmacy services.
CVS said it plans to spend just as much investing in Aetna this year as it expects to save from integrating it.
The lingering issues caused investors to question whether the Aetna acquisition can really help CVS navigate woes in retail pharmacy and among pharmacy benefit managers.
Read the full report here.