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Growing sales as Covid vaccine demand fades

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CVS HealthIn the next year, investors will be faced with a new challenge: showing that it is able to drive growth and maintain customers even when demand for Covid vaccines and other testing diminishes.

After the announcement by Health-Care Company, shares fell almost 5% on Wednesday beat expectationsfor the fiscal fourth quarter earnings but decided not to increase its outlook in 2022.

The pharmacy chain has seen a rise in foot traffic over the past 12 months due to pandemic-related service. CVS has given more than 32,000,000 Covid blood tests and more that 59 million Covid vaccinations. Its vaccination volume peaked in the fourth quarter — with more than 20 million shots — as Americans prepared for holiday gatherings and the omicron variant spread across the country, encouraging more people to get booster shots. The mandates of employers for vaccines the authorization of vaccinesThe demand was also higher for children between the ages of 5 and 11 in autumn and winter.

It has also led to increased sales and new customers. Some customers were so kind as to put items in baskets while they shop for their shots.

The number of Covid cases has dropped significantly in the United States. Johns Hopkins University has compiled data that shows that the seven-day average number of cases is 234941, representing a 46% decrease from last week. This decline has been affecting some states including New York. to lift indoor mask mandates.

CVS’s plans to grow as a leading health-care provider will become increasingly prominent, even though pandemic tailwinds are fading. It acquired Aetna’s health insurer in 2018, and now owns Caremark, the pharmacy benefits manager. The company is currently reorganizing its retail footprint. closing about 900 locationsAdding more services for others. It also plans to establish primary care clinics, where patients can see a doctor.

Karen Lynch, chief executive of CVS, stated that the worldwide health crisis has strengthened loyalty and increased usage of its website and mobile app. The number of people visiting CVS’s website increased to over 2 billion by 2021. This is nearly 55% more than the previous year. According to her, CVS serves now 40 million digital customers. This is an approximate 10% increase over the six-months.

She stated, “Our work in testing and vaccinating America for Covid was a strong example of the relationships we’re building which leads to customers looking to a wide range of other services at CVS Health.”

Brian Tanquilut, an analyst for Jefferies, said the company has a larger audience for those health services — if it can keep customers engaged.

“There’s no disputing that ‘Hey! We have a chance here’,” he stated. They’re already loyal, and you must keep them there.

According to him, sales are likely to slow down before the health-care strategy takes effect. He stated that although sales are expected to slow down, it appears the company is looking for primary-care providers to purchase.

He has set a $120 price target on CVS stock, which is about 13% more than the current trading.

Shawn Guertin was the Chief Financial Officer of CVS. He stated on Wednesday’s earnings call that CVS 2022’s forecast assumed there wouldn’t be another Covid shot. According to Guertin, the vaccine volume will decline by around 70% to 80% while in-store testing will fall by 40% to half of what it was in 2021.

He said that there will be a modest increase in the sales of Covid at-home tests. CVS has sold 22 million of its over-the-counter test products, and about 70% were bought in the fourth quarter.

The boom in booster shots occurred earlier than they expected, he said. According to him, this led to more sales in the fourth quarter of 2020 than in the first quarter.

However, he noted that it wasn’t all bad for the company. The company also had to pay more for health insurance, which helped offset some sales.

Ashtyn Evans is an Edward Jones analyst who said that CVS’s expected drop in vaccinations and testing might be too conservative. However, even if the prediction was correct, Evans said CVS will continue to receive long-term benefits from pandemics.

She said, “Now they have customers that are more used going into CVS stores, and interacting via CVS through their app.” They are exiting the pandemic having a larger customer base than they had when they began.

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