Don’t sweat Caremark’s client losses
Posted on February 26, 2010 at 12:48 pmThat seems to be what the smart money on Wall Street is saying. Almost four months after CVS Caremark said a number of big PBM customers had bolted — sending its shares down 20 percent — the company is a favorite both of analysts and hedge funds. And that big Nov. 5 drop in the stock? Five of the seven dollars lost that day have been recovered.
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CVS Caremark is Fast Money panelist’s best idea
Posted on February 8, 2010 at 7:20 am
Karen Finerman, a regular contributor to CNBC’s Fast Money roundtable, says investors should take a look at CVS Caremark, which she says has 50 percent upside.
“You’re getting the PBM side of the business for about 7 times earnings,” she said, “and that is just way, way too cheap.”
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Walking down the path of personalized medicine
Posted on January 26, 2010 at 8:05 amThe Boston Globe takes a close look at how pharmacy benefit managers CVS Caremark and Medco are working to incorporate genetic testing into their businesses.
When a doctor submits a prescription, for example, the company that manages a patient’s drug benefits may call the doctor and offer a genetic test. Ultimately, results might discourage the doctor from prescribing a drug that won’t work, help determined what dosage to use, or suggest an equally effective generic option. CVS said that testing would be integrated into the prescription-filling process.
HT: David Williams at Health Business Blog
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Concerns over a $300 million contract
Posted on January 25, 2010 at 11:27 amAndy Sher reported Friday on concerns raised by two groups about CVS Caremark’s bid for Tennessee’s $300 million contract for managing state employees’ drug benefits. The pharmacy benefits manager, which is among four companies seeking the contract, has suffered contract losses, client lawsuits and an FTC investigation into its practices.
Tennessee Citizen Action and Change to Win are asking the state to emphasize transparency and accountability in awarding the contract.
“This contract provides a clear opportunity for the state to save money and enhance oversight of health care expenditures,” Citizen Action executive director Tom Peters said. “CVS Caremark has a track record that raises questions about whether it will provide the transparent and cost-effective services taxpayers deserve.”
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New boss for the old Caremark
Posted on December 21, 2009 at 3:23 pmCVS Caremark has named Per Lofberg, a veteran of the pharmacy benefit management, venture capital and consulting sectors, head of its PBM division. He most recently ran Generation Health Inc., a strategic partner with CVS Caremark focused on expanding pharmacogenomic clinical and testing services for customers. The AP says the appointment comes with an additional CVS investment in Generation Health.
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Somebody believes CVS Caremark will climb out of its hole
Posted on December 17, 2009 at 9:03 amShares of the company dove last month when it warned the Caremark pharmacy benefit management unit is losing customers. They’ve been slow to recover since (Ticker: CVS), but one options investor has faith they’ll rise by at least a quarter over the next two years.
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Caremark’s contract losses could weigh on credit ratings
Posted on December 11, 2009 at 11:10 amUpdating its analysis of CVS Caremark, Fitch Ratings says the lower renewal rates in the pharmacy benefit management business could cause it to lower its ratings.
In terms of business volume coming up for renewal, there is about $1.5 billion remaining for 2010 and $7 billion left for 2011. The main issue to watch over the next 12-18 months is whether the company can curtail the contract losses at its PBM business as it goes into the 2011 selling season. If the business has ongoing sizable losses, ratings could come under pressure.
SEE ALSO: Big clients drop Caremark
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Analyst action: Clarcor, CVS, SunTrust
Posted on November 20, 2009 at 10:42 amBB&T analyst Kevin Maczka on Thursday raised his rating on shares of Clarcor (Ticker: CLC) from ‘hold’ to ‘buy.’ His target price for the Franklin-based filtration and packaging company is $40, 27 percent above its Wednesday close.
Two stocks with a local presence have also received votes of confidence. At Credit Suisse, Craig Siegenthaler has lifted his target for SunTrust (Ticker: STI) to $23 from $21, while UBS analyst Neil Currie has started covering CVS Caremark (Ticker: CVS) with a ‘buy’ rating and a $34 target.
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Calming the Caremark waves
Posted on November 13, 2009 at 8:28 amCVS Caremark CEO Tom Ryan had some honest words about the state of and the outlook for his company’s pharmacy benefit management business, which is going through a bit of a rough patch.
“I take some ownership on this. We focused too much on the retail side. We were excited about the retail side; it’s why we did the deal, because we could offer something to the consumer. We forgot to talk about the PBM capabilities, that’s why clients sign us up, right?” Ryan said.
Analyst action: CVS Caremark, Synovus
Posted on November 11, 2009 at 10:43 amScott Mushkin at Jefferies has lowered his price target on shares of CVS Caremark (Ticker: CVS) to $39 from $42 after the company’s so-so earnings call last week. He still rates the stock a ‘buy.’
Over at Morgan Keegan, Robet Patten has cut his rating on Synovus Financial to ‘market perform’ from ‘outperform.’ Shares of Synovus (Ticker: SNV) have lost three-quarters of their value this year.
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Latest Senate health plan a winner for hospitals
Posted on October 6, 2009 at 1:40 pmThe nation’s hospital companies – a large number of whom call Middle Tennessee home – are set to come out ahead if the latest version of the Senate’s plan to reform health insurance becomes law. That’s in large part because a previous deal in which hospitals pledged to produce $155 billion in savings by 2019 still stands. In terms of sheer dollars, local players HCA and Community Health Systems would benefit most.
On the flip side, pharmacy benefit managers such as Caremark don’t have much to like from this new version: They’ll be required to disclose the incentives drug makers are paying them.
CVS Caremark is just so misunderstood
Posted on September 1, 2009 at 9:03 amA week after Barron’s stated the case for the shares of CVS Caremark (Ticker: CVS), Fortune weighs in on the topic. Even though the stock has beaten the S&P by 16 points this year, it trails its peers.
The market questions whether a drugstore chain, which has expertise in retail sales, can run a PBM, which negotiates on behalf of employers and insurance plans to purchase drugs from pharmaceutical companies. As a result, CVS’s price/earnings ratio for the next 12 months is 13, while Walgreen’s is 15 and Medco’s is 20. That makes CVS, which is poised for strong growth, a bargain - no matter how the health-reform battle plays out.
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Caremark powers CVS earnings lift
Posted on August 4, 2009 at 7:23 amAnother strong quarter from its pharmacy benefit management division — revenues were up 15 percent from a year ago — has led CVS Caremark to again raise its earnings guidance. Shares of the company (Ticker: CVS) are up more than 4 percent in pre-market trading.
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Group targeting CVS Caremark ‘optimistic’
Posted on May 13, 2009 at 5:16 pmA group of independent pharmacists says it is “cautiously optimistic” following a meeting with the Federal Trade Commission.
The National Community Pharmacists Association has for months been pressuring the commission to investigate CVS Caremark over claims that the company engages in anticompetitive practices. The group also seeks to reopen the 2007 merger that formed the joint company.
Further details here.
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Costs cut CVS Caremark earnings
Posted on May 5, 2009 at 11:03 amIntegration costs and other factors caused CVS Caremark Corp.’s first quarter earnings to fall slightly compared to last year.
The company’s earnings dipped to $743.5 million, down from $748.5 million in ‘08. Net Revenue, on the other hand, increased to $23.4 billion, up from $21.3 billion last year.
Earnings release available here.
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