By Dean Seal
CVS Health stock is on track for its best day since October 2008 after the company turned in fourth-quarter results and 2025 guidance that weren't as bad as investors may have expected.
The stock is up 15% at $63.33 in early trading, building into a 41% year-to-date gain. The solid start of the year came after hefty declines in 2024. This time a year ago, the stock was trading at around $77.29.
The healthcare heavyweight has been managing higher-than-expected medical costs in its Aetna insurance unit that weighed on results last year. But adjusted earnings of $1.19 a share in the last three months of 2024 cleared analyst forecasts for 91 cents a share, according to FactSet.
The company also reported Wednesday that revenue rose 4% to $97.71 billion, beating analyst targets for $97.09 billion. The top line was boosted by growth in CVS's healthcare benefits and pharmacy segments, more than offsetting a decline in its health service segment.
CVS is guiding for adjusted earnings of $5.75 to $6 a share for 2025, in line with the consensus estimate of analysts polled by Factset.
Both the results and the guidance were better than feared, Mizuho analysts said in a research note on Wednesday, and management sounded positive on the company's earnings call.
"We continue to believe 2025 is a transition year that should set the company on a multi-year path to a recovery in margins in the health insurance business," the analysts said.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
February 12, 2025 11:02 ET (16:02 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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