CVS’ stock slips after earnings beat by a wide margin but full-year outlook was cut due to higher medical costs

Shares of CVS Health Corp.
CVS,
+1.82%
fell 0.3% in premarket trading Wednesday, after the drugstore chain and health care services company’s fourth-quarter results beat expectations by wide margins, but lowered its full-year outlook because of “elevated medical cost trends.” Net income fell to $2.05 billion, or $1.58 a share, from $2.33 billion, or $1.77 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $2.12 beat the FactSet consensus of $1.98. Revenue grew 11.9% to $93.81 billion, above the FactSet consensus of $90.58 billion, as health care benefits revenue rose 16.1% to $26.73 billion, health services revenue increased 12.3% to $49.15 billion and pharmacy and consumer wellness revenue was up 8.6% to $31.19 billion. After finalizing the medical cost trend analysis, the company lowered its 2024 guidance for adjusted EPS to “at least $8.30” from “at least $8.50,” while the current FactSet consensus is $8.47. The stock has gained 5% over the past three months through Tuesday, while the S&P 500
SPX,
+0.23%
has advanced 13.2%.