CVS - The Correct Play On CVS Health
2024-06-06 10:13:15 ET
Summary
- CVS Health Corporation shares have dropped roughly 25% since April 1, 2024, due to a hugely disappointing 1Q24 report and revised expectations for FY24.
- The company is facing higher medical benefit ratios in its Medicare Advantage plans and is ineligible for full level quality bonuses in FY24.
- However, with a strong outlook for FY25 and a 4.4% dividend yield, CVS remains an attractive investment option if traded correctly.
- An analysis around CVS Health follows in the paragraphs below.
Shares of healthcare solutions behemoth CVS Health Corporation ( CVS ) are down some 25% since April 1, 2024, as an abysmal 1Q24 report and downward revised expectations for FY24 weigh. The company is experiencing a higher-than-expected medical benefit ratio in its Medicare Advantage plans, while it is ineligible for full level quality bonuses in FY24 due to fewer 4-star plans. With 87% of its Advantage members expected to return to 4+ star plans (setting up a stronger FY25) and a safe 4.4% dividend yield against net leverage of 4.1, CVS again merited a deeper dive. An analysis follows below....
The Correct Play On CVS Health