CVS Health (CVS) up 3% on new corporate initiatives
13:36, 9 December 2021
CVS Health stock rose on Thursday as the US drug store chain increased its full-year earnings guidance alongside increases to a stock buy-back programme and dividend.
In pre-market trading on the New York Stock Exchange, the stock was up 3% at $96.
CVS said it now expects 2021 adjusted earnings per share (EPS) of at least $8.00 compared with prior guidance of $7.90 to $8.00. The company expects revenue of at least $290.3bn, up from prior its guidance of $286.5bn to $290.3bn.
For 2022, CVS said it expects total revenues in the $304bn to $309bn range and adjusted EPS of $8.10 to $8.30 per share.
The company said it will also increase its yearly dividend by 10% to $2.20 from $2.00 effective 1 February 2022. It also has authorised a $10bn (£7.57bn) share repurchase programme for the first time since 2017.
“We have a strategic financial approach that will focus on a combination of foundational business growth, new sources of incremental value and strategic capital deployment in order to reach our long-term growth targets and drive shareholder returns,” CVS CFO Shawn Guertin said in a press release.
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CVS Health also presented its strategy to make healthcare “more convenient, personalised and affordable,” which includes advancing care delivery capabilities, starting new all-payer health products and services, enhancing omnichannel health services and driving a digital-first approach to expand its reach.
“By leaning into our high-growth foundational businesses and expanding our reach in areas like health services and primary care, we have an opportunity to shift care to be more centered around the consumer while capturing a meaningfully greater portion of health care spend," CVS CEO Karen Lynch said.