CVS Impresses at Investor Day; Shares Reach New All-Time High

American pharmacy retailer chain CVS Health (CVS) hosted its 2021 Investor Day on December 9, where the company announced its financial performance expectations, a new share buyback program, and rewarded shareholders with a common stock dividend hike.

Following the news, shares reached a new all-time high of $97.77 and closed the day up 4.5% at $97.31 on December 9.

CVS believes in making healthcare more personalized, convenient, and affordable for customers. For which it is taking steps like reducing store count by 900 over the next three years and focusing on digital and omnichannel capabilities.

The company also announced plans to launch new all-payer health products and services, which will include expansion of home health solutions and health-related subscription models for the benefit of a larger population.

Updated FY21 Guidance

Based on solid underlying business momentum, CVS increased its full-year fiscal 2021 guidance. The company now forecasts FY21 total revenue to be at least $290.3 billion and adjusted earnings to be at least $8 per share.

Additionally, CVS initiated full-year fiscal 2022 guidance to include a total revenue forecast between $304 billion and $309 billion, and an adjusted earnings projection between $8.10 per share and $8.30 per share.

Rewarding Shareholders

For the first time since 2017, CVS increased its common stock dividend and increased its share buyback program.

The company will increase its common stock dividend by 10% to $2.20 per share payable on February 1, 2022. The Board has also approved a share buyback program of $10 billion, to offset share dilution in 2022.

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Management Comments

CVS Health President and CEO, Karen S. Lynch, said, “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.”

She added, “Ultimately, this plan is only possible with our unique combination of assets which will allow us to lower costs, increase access to quality care and improve health outcomes for consumers, patients, and members – while delivering superior results for shareholders.”

Wall Street View

With 15 Buys and 2 Holds, the CVS stock commands a Strong Buy consensus rating. The average CVS Health price target of $109.71 implies 12.74% upside potential to current levels. Shares have gained 34.8% over the past year.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into CVS’ performance.

In November, CVS Health website traffic recorded a 7.23% year-over-year decrease in monthly visits. However, year-to-date website traffic growth increased significantly by 71.71% compared to the same period last year.