CVS is targeting growth through healthcare services.
CVS Health plans to introduce new health products, services and technologies as it increases guidance for sales and profits.
At its 2021 Investor Day held Dec. 9, CVS outlined several priority areas it will focus on for strategic growth. These include pivoting its store footprint to focus on sites dedicated to offering primary care services, enhanced HealthHUB locations, and traditional CVS Pharmacy stores. As announced in November, the company will close approximately 900 stores over the next three years to reduce store density and ensure it has the right kinds of stores in the right locations.
In addition, CVS said it will take a “digital-first, technology-forward approach” designed to expand reach and engagement with online customers. This approach will include launching new consumer-centric services and offerings, enhancing the customer experience and streamlining business operations, which it hopes will produce higher customer satisfaction levels and lower costs.
The company also plans to enhance omnichannel health services to meet the needs of consumers when and where they want them, including at and away from home in person, as well as virtually. This will include execution of the company’s omnichannel pharmacy strategy, with integration across all fulfillment channels.
Other highlights of CVS’ strategic growth plan include:
Advancing primary care delivery capabilities by guiding consumers to sites and to providers that meet their needs, both in person and virtually.
Launching new all-payer health products and services, with new health solutions for employers, consumers and health plans. This will include the expansion of home health services, the launch of health-related subscription models for broader populations, the commercialization of analytics and insights, and establishing all-payer and provider enablement services.
CVS has been transforming itself into a digital health solutions provider for some time. Earlier this week, the company announced a new partnership with Microsoft to create innovative solutions to help consumers improve their health. The company took one of its first major steps in this direction when it purchased Aetna Inc. for nearly $70 billion in late 2018.
Other recent innovative steps CVS has taken in the area of healthcare include partnering with IBM Watson Advertising to enable chat-style, one-to-one interactions and targeted mobile promotions designed to encourage flu shots, as well as offering a proprietary solution called “Spoken Rx” that can read prescription information aloud at all of its pharmacy locations.
“Now is the time to undertake our next major evolution and capitalize on our role as the leading health solutions company in America,” said CVS Health president and CEO Karen S. Lynch. “By leaning into our high-growth foundational businesses and expanding our reach in areas like health services and primary care, we have an opportunity to shift care to be more centered around the consumer while capturing a meaningfully greater portion of health care spend. Ultimately, this plan is only possible with our unique combination of assets which will allow us to lower costs, increase access to quality care and improve health outcomes for consumers, patients and members — while delivering superior results for shareholders.”
CVS revised its full year fiscal 2021 projections and also released its first set of predictions for full year fiscal 2022. For fiscal 2021, the drugstore giant now expects total revenues of at least $290.3 billion, from a prior range of $286.5 to $290.3 billion. The company is also revising its earnings per share (EPS) forecast to $5.50 to $5.61 from a prior range of $5.46 to $5.67, and updating its adjusted EPS forecast to at least $8 from a prior range of $7.90 to $8.00.
For fiscal year 2022, CVS expects total revenues of $304 to $309 billion, EPS of $7.04 to $7.24, and adjusted EPS of $8.10 to $8.30. As part of its long-term growth trajectory, CVS Health is targeting a return to low double-digit adjusted EPS growth in 2024 and beyond.