From CNBC: 2024-10-04 11:30:17

CVS Health is considering a breakup amidst falling stock prices and internal struggles. The company has spent billions on acquisitions but faces challenges in its insurance and pharmacy units. A possible split may be on the table, although some analysts see risks in separating the integrated business segments.

CVS’ earnings have been slashed as it grapples with profits. The company has already announced a $2 billion cost-cutting plan and is laying off almost 3,000 employees to improve margins. Executives are seeking ways to recover and boost shareholder value, with potential changes to be announced during upcoming earnings calls.

Separating Caremark from Aetna could impact CVS’ retail pharmacy operations and competitive edge among rivals. The company has the largest market share in prescription drug revenue but faces profitability challenges due to increasing competition and lower reimbursement rates. CVS’ focus on cutting store numbers also reflects wider industry struggles.

Oak Street Health and Signify Health, recent acquisitions by CVS, enhance its health care services. Integrating primary care clinics with retail pharmacies could be beneficial, but industry analysts are cautious about potential risks. Despite significant revenue growth in these areas, a possible breakup could complicate the distribution and future of these assets.



Read more at CNBC: CVS is considering a break up. Here’s why that could be risky