CVS Health stock just sunk to its lowest price in 3 years after the pharmacy chain cut its 2024 profit forecast

Shares of CVS Health Corporation are taking a beating in premarket trading this morning. As of the time of this writing, CVS stock is down over 12% to $59.49 per share. That’s around a low the company’s stock price hasn’t seen since November 2020.



What’s driving this cliff edge in CVS stock this morning? The company’s Q1 2024 earnings are to blame. As CNBC reports , CVS Health missed on both its earnings per share and revenue. CVS reported an adjusted earnings per share of $1.31 when the street was expecting an adjusted EPS of $1.69. And CVS’s revenue came in at $88.44 billion when the street was expecting $89.21 billion. 



For the quarter, CVS had a net income of $1.12 billion—over a billion dollars less than the $2.14 billion net income CVS reported in the same quarter a year earlier. But the main reason CVS stock seems to be getting pummeled this morning is that the company cut its 2024 profit forecast due to its insurance unit seeing increased medical costs, notes Reuters.



CVS said it now expects adjusted EPS for 2024 to be at least $7.00, down from at least $8.30 due to a surge in people undergoing medical procedures that they previously put off during the pandemic. As more patients now elect to have these postponed procedures, CVS’s insurance divisions incur more costs, affecting the company’s bottom line.



As far as CVS brick-and-mortar locations, there was a slight glimmer of hope there for the company. The company’s pharmacy and consumer wellness division, which dispenses prescriptions in the chain’s 9,000 locations, saw sales increase almost 3% to $28.73 billion, notes CNBC.



Still, CVS’s results can’t be seen as anything but a disappointment for the company, which has faced increasing challenges over the past year. Those challenges include laying off around 5,000 workers last summer and, more recently, seeing the company’s Caremark pharmacy benefit manager losing Tyson Foods , one of its largest and most high-profile customers in January.