Replies to post #106827 on Savvy Trades and Investments

[researcher59]

CI and UNH also down in sympathy with CVS -

WSJ -

The PBM business, which negotiates drug prices and offers other services like mail-order pharmacies, is highly profitable and largely controlled by just three companies: CVS, Cigna and UnitedHealth Group. Any sign those long-term profits are potentially at risk can send jitters through Wall Street.

Shares of Cigna and UnitedHealth also fell Thursday.

[researcher59]

CVS -5.92 to 66.80, bouncing back from the morning low of 64,62 after the company reaffirmed 2023 adj EPS guidance of $8.50 to $8.70 and expects immaterial impact to long term outlook. The risk is that Blue Cross in other states will follow California's new model, but that remains to be seen. Even so, CVS may have to make some pricing concessions.

I added some shares in the $65's, hedged with covered calls. My cost basis gets lower each week as I roll over the calls.

8K -

CVS Health Corporation (“CVS Health,” the “Company,” “we” or “our”) understands that Blue Shield of California has announced today, as part of a new pharmacy care model, that it will use a number of pharmacy service providers beginning in 2024. CVS Caremark will continue to provide specialty pharmacy services. The financial impact associated with the partial termination of the Blue Shield of California contract is not expected to have an impact to our previously issued 2023 guidance and is expected to have an immaterial impact on our longer-term outlook. CVS Caremark remains the leading pharmacy benefit manager in the United States, serving more Americans and more health plans today than any of our competitors. CVS Health believes customers choose CVS Caremark because of its ability to seamlessly administer complex pharmacy and specialty pharmacy benefits with high levels of customer service and satisfaction, as well as our leading cost position. We are pleased to continue to serve Blue Shield of California customers for their specialty pharmaceutical needs. Specialty pharmacy spend now represents over 50% of pharmacy benefit spend in the marketplace. We remain confident in the value that CVS Caremark provides to our customers and that our integrated solutions will continue to resonate in the marketplace as we deliver our leading cost position and service excellence to our customers.

CVS Health reaffirms its 2023 full year GAAP diluted earnings per share (“EPS”) guidance range of $6.53 to $6.75, adjusted EPS range of $8.50 to $8.70 and cash flow from operations range of $12.5 billion to $13.5 billion.