Customers have been attracted to vaccines and covid testing. CVS Health’s Stores during the pandemic. Investors will be presented by the company on Thursday about how they plan to utilize other services for health care to ensure that people keep coming back.

It will host its first investor day since 2009, when the company and drugstore chain are merged. Karen Lynch, CVS CEO and top executives will share their financial outlook and business strategies.

CVS is now a company that focuses on health care, rather than being a retailer. In addition to its 10,000-plus U.S. locations, CVS also has the pharmacy benefit manager Caremark as well as Aetna, which is a U.S. health insurer. MinuteClinics is a name for urgent-care clinics found in many of its stores. It is also converting more drugstores to HealthHubs. This new format store offers everything from yoga classes and therapy appointments to sleep apnea screenings and diabetes management.

CVS shares have risen 36% since Tuesday’s close. Stock closed at $92.93, an increase of 0.3%. Market value for the company is $122.63. billion.

On its third-quarter earnings callCVS indicated that after making adjustments it expected to earn $7.90-$8.00 per share. This is an increase from the $7.70-7.80 range. Although it did not give a forecast for next year’s earnings, analysts had provided their consensus estimates of adjusted earnings per share around $8.20.

Three examples are provided below Themes investors are most interested in Thursday

Do high levels of vaccines and Covid-19 testing continue to be a problem? Investors will pay attention to CVS’s latest outlook regarding how much CVS can sell. the pandemicThis could impact the demand for hospitalizations and preventive care in the months ahead.

CVS’s sales and foot traffic has increased significantly during the Pandemic by using Covid-19 vaccines. The company had administered approximately 38 million Covid test results and 43 million Covid vaccinations since the outbreak of the global epidemic.

CVS stated in the third quarter earnings call that this dynamic was expected to slow even though Americans are receiving booster shots. children ages 5 to 11 get first-time dosesPeople can get tested to determine whether they have a cold or Covid. In 2022, the vaccine and testing revenue, which was more than $3 billion, is expected to drop between 30% and 40%. The company also predicted that a decrease in vaccine and testing sales would result in fewer customers shopping at the store, which could lead to a reduction of purchases such as shampoo, milk, and boxes of tissues.

However, falling Covid would be a boon for the company’s business in health insurance. A lower number of cases will result in fewer hospitalizations. Shawn Guertin (CVS Chief Financial Officer) stated that Aetna’s expenses have risen rapidly and they are currently at a standstill. higher than expected in the third quarter because of the delta variant fueling cases.

Since CVS announced its third-quarter earnings for the quarter, vaccine rates have increased have spiked again and several states have confirmed cases of the omicron variant — injecting new uncertainty.

CVS is reducing one of its most visible assets: the store footprint. CVS stated last month that it would reduce its store footprint. close about 900 stores over the next three years — or roughly 9% of its locations across the country.

This raises concerns about the store’s role and their integration into the company vision.

For investors, shuttering stores could be good news — if they are underperforming and aren’t driving many sales, services or prescriptions anyway. However, the company must explain to investors how they will keep its stores relevant and profitable.

CVS has been criticized by some retail analysts for its unremarkable and sloppy stores. GlobalData’s managing director Neil Saunders said that company needs to improve store appearances or customers will move on.

CVS announced the closure of three stores and said that it will have three types: one offering primary-care services, another selling medical supplies. A HealthHub will replace the second. One third of the stores will continue to be traditional shops with pharmacies as well as everyday goods like cold medication, toothpaste, and toilet paper. The investor day may include renderings of the stores and more details on how they will function.

Michael Cherny from Bank of America is a bank of America analyst in health care. He stated that CVS would have to ensure it doesn’t give away prescriptions to other competitors as a result of closings. The company is known for transferring customers to local locations and has an excellent track record.

He reduced fiscal 2022 earnings per stock estimate by $8.24 to $7.23, and the fiscal 2023 earnings par share estimate by $9.10 or $9.08. He did increase the fiscal 2024 earnings estimates per share from $10.00 to 10.01 because he believes CVS will be able to add more services to existing stores.

CVS is not the only pharmacy that’s increasing its business in health-care. Rival Walgreens Boots AllianceVillageMD reached a deal to open hundreds of doctor offices inside of its drugstores.Now it is majority owner of the primary-care company.

Cherney stated that the Walgreens/CVS retail business is facing pressure from online and brick and mortar competitors. He said that drugstore chains view providing convenient health care in local pharmacies as a “potential that’s either undertapped or untapped”.

He said that drugstores may have more customers and mindshare if they offer a Covid test to many Americans or give them a jab. He suggested that they might think about CVS next time they have to get a flu shot, or need urgent care.

Cherney explained that “this is a major component of their ability to prove they can serve so many healthcare needs across the nation.”