CVS Health Corp

CVS: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$36.00	Nvcsfh	Rctgnpdx

CVS Earnings: Weak Medicare Advantage Profits Cut Into 2024 Outlook and Fair Value Estimate

Julie Utterback

May 1, 2024

Narrow-moat CVS Health delivered weak first-quarter results due to deflated profits in Medicare Advantage, or MA, where spiking medical utilization and mispriced plans caused insurance segment profits to decline while the pharmacy benefit management business dealt with the Centene contract loss. Management cut its 2024 guidance primarily on the weak MA trends, and we are reducing our intermediate-term expectations for CVS, as well, which pushed down our fair value estimate to $93 per share from $103. Shares remain undervalued.

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