CVS Health Hopes Partnerships Will Power Growth
CVS Health Corp (NYSE: CVS) has had a rough go of it during the past year. Over the last twelve months, shares in the pharmaceutical drug store chain and pharmacy benefit manager (PBM) have dipped significantly, falling 19%. Rubbing salt in the wound is the fact that the S&P 500 has increased by 11% over the same time period, meaning CVS Health investors have lost to a basic S&P 500 index fund by 30 percentage points in a year's time. Ouch!
The stock price has fallen as the business has struggled, losing important deals to rival Walgreens Boots Alliance and dealing with increasingly hot online competition from Amazon.com, Inc. Last November, CVS CEO Larry Merlo outlined a four-point plan for the company to return to healthy growth. The first step of the plan, as Merlo described it in the S&P Capital IQ transcript of the company's second quarter conference call, was "leveraging our enterprise capabilities and CVS Pharmacy's compelling value proposition to partner more broadly with other PBMs and health plans."
Since the plan was implemented, CVS has announced three new partnerships that seem to be of the scale and magnitude necessary to drive growth in the quarters and years ahead.
Source: Fool.com
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