CEO is ousted, CVS Health (US) falls over 7% as Q3 preliminary results miss expectations

CVS.US opened lower on Friday and fluctuated below water, down more than 7% to $58.80 at the time of writing. On the news front, CVS Health's preliminary financial data showed that its adjusted EPS in Q3 was $1.05-$1.10, lower than the market's expectation of $1.7, and it canceled its 2024 profit guidance, warning investors not to rely on its previous guidance "given the continued increase in medical cost pressures in its healthcare benefits segment." The company noted that its healthcare benefits business is expected to have a medical loss ratio of 95.2% in Q3, far above Wall Street's expectations. The data also reflected a $1bn expense for underfunding premiums to cover excess medical costs.

Moreover, CVS Health announced management changes on Friday, according to which the company named David Joyner as its new CEO, ending Karen Lynch's tumultuous tenure at the drug retail giant. Joyner, who is 60 years old and has long served as a CVS Health executive, officially took over on Thursday.