CVS stock rises on earnings beat, Oak Street Health deal
Yahoo Finance Live anchors discuss fourth-quarter earnings for CVS.
- Tons of earnings still to get to this morning. Let's check in on what's trending right now on the Yahoo Finance platform. First up, CVS being on the top and bottom lines as revenue increased over 9% year over year, driven by growth across all segments. CVS also announced they are buying Oak Street Health in an all-cash transaction for $10.6 billion. That was rumored yesterday. Now, this deal becoming official, not a solid quarter, I would say from a CVS. I'm locking in on the adjusted operating profits for the quarter, down 144-- down $141 point million year over year, pressure on that retail segment, top of mind here, I think, for investors.
- The company is also coming out with the forecast for the full year that is above estimates. I think that's helping matters. You see there all of its segments seeing pretty big increase in revenue, pharmacy services up 11%, retail up 4%, and health care benefits up 11%. As it does plan on closing and then digesting the Oak Street deal as well as, remember, it bought Signify Health, it is pushing back some of its longer-term earnings targets, but the short-term ones seem to be going up.
- All right, and you were talking about that health dashboard, or at least somewhat of a bringing together of all of these different brands that they are acquiring. And when you think about what that might look like in the future, they're really continuing to pound the pavement on this digital experience, this health dashboard, everything from the health care insurance side of the equation to perhaps that just MinuteClinic, but through the acquisition that they just announced with Oak Street.
Perhaps that's where they build out that infrastructure, even more so from here. So 47 million digital customers, they grew that by 7 million during this most recent year here. And so within that health dashboard, that might be where you start to see some of those services really come together.
- Yeah, I would say the price tag for this deal is very high for a company that is losing a large sum of money as we talked about earlier on this one. But now, I think CVS is now at a point-- should you be thinking about it as a retail operation at all? I think these are now entirely different business models, and these acquisitions, there has not been any indication that they are boosting traffic to the stores, selling more candy bars, selling more stuff. So I do think over time CVS might be looking at a situation where it spins off some of these stores in a real estate investment trust, something to unlock value here because this is a different company than it was the past couple of years.
- Very different company.
- Big changes.