This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Profit Booster

Finimize

Contributor:
Finimize
Visit: Finimize

What’s going on?

CVS reported better-than-expected earnings on Wednesday, as the healthcare giant’s shots do wonders for American shoppers and its own bank balance.

What does this mean?

Coronavirus vaccines are still in high demand in the US, with Delta still on the prowl and booster shots now the must-have winter accessory. And CVS has been more than happy to provide: the company administered 9 million vaccines last quarter, which helped push up retail revenue by 10% versus the same time last year. What’s more, a rise in visits to the doctor has meant more prescriptions for CVS to fill, which boosted its pharmacy revenue by a tidy 9%.

All in all, that brought overall revenue up 10% last quarter. And CVS doesn’t think that’ll dry up anytime soon: the US authorized the Pfizer vaccine for kids aged five to eleven this week, which might just be why it raised its full-year profit outlook. Investors were impressed: they sent CVS’s stock up 5% after the news.

Why should I care?

The bigger picture: The best of both.

CVS is actually an “integrated healthcare provider”, meaning it both sells drugs and offers health insurance services. That’s proved forward-thinking: the pandemic has, after all, boosted retail revenue through vaccines and tests, even as it’s increased costs for its insurance business. Pure-play companies like Humana haven’t been so lucky: the health insurance firm announced on Wednesday that Covid’s hurt its bottom line, and its stock initially fell 7%.

Zooming in: CVS is innovating.

CVS has something else up its sleeve: the company’s increasingly been linking its different healthcare offerings with one another – encouraging its health insurance members to visit its clinics, say. It’s also just launched a virtual care service, allowing customers to see a doctor around the clock. That could be a shrewd move: McKinsey reckons the US telehealth industry will grow from its 2019 revenue of $3 billion to as much as $250 billion.

Originally Posted on November 3, 2021 – Profit Booster

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with permission from Finimize. The views expressed in this material are solely those of the author and/or Finimize and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

trading top