Bulletin: CVS Health Corp.'s Lower Earnings Guidance For 2019 Lessens Ratings Cushion; Continued Debt Reduction Expected

NEW YORK (S&P Global Ratings) Feb. 21, 2019--S&P Global Ratings said today that CVS Health Corp.'s lower earnings guidance for 2019 lessens room in the rating for further underperformance and execution missteps. CVS expects operating income of about $11.5 billion (excluding its health care segment and Aetna) this year, which is down in the mid- to high-single percentage range compared with actual results in 2018. Industry headwinds in the long-term care (LTC) business, reimbursement rate pressures in the retail and pharmacy benefits management operations, lower drug price inflation, and business reinvestments are factors the company noted in its soft 2019 guidance. CVS also took a $2.2 billion goodwill impairment for its LTC business (the second such charge for a total

...NEW YORK (S&P Global Ratings) Feb. 21, 2019--S&P Global Ratings said today that CVS Health Corp.'s lower earnings guidance for 2019 lessens room in the rating for further underperformance and execution missteps. CVS expects operating income of about $11.5 billion (excluding its health care segment and Aetna) this year, which is down in the mid- to high-single percentage range compared with actual results in 2018. Industry headwinds in the long-term care (LTC) business, reimbursement rate pressures in the retail and pharmacy benefits management operations, lower drug price inflation, and business reinvestments are factors the company noted in its soft 2019 guidance. CVS also took a $2.2 billion goodwill impairment for its LTC business (the second such charge for a total of $6 billion in 2018), and expects LTC to be a drag on performance in the near future. The CVS-Aetna transaction has still not received final approval from the U.S. District Court. We do not anticipate any material changes...

Bulletin