CVS Health Corp. (CVS) has struggled since its acquisition of Aetna and remains a work in progress, Real Money contributor Stephen “Sarge” Guilfoyle says.
The net cash position of CVS rose from $10.8 billion to $12.5 billion during the past 12 months and the healthcare retailer has made an effort to pay down its debt levels. The company’s long-term debt fell to $51.9 billion from $59.2 billion 12 months ago with $4.2 billion considered current since $1.6 billion of that is part of CVS Health’s $18.1 billion in long-term lease liabilities.
“This will obviously leave a mark on the firm's current ratio,” Guilfoyle wrote in a recent Real Money Pro column. “Have I sufficiently gotten the point across that even though I am long the stock and I do like the current CEO, I am uncomfortable with the balance sheet?” Get more of his trading strategies and investment ideas over on Real Money.
While the company is making improvements on the asset side – it rose to $60 billion from $56.3 billion, but the current liabilities expanded from $62 billion to $67.8 billion.
The company’s current ratio is 0.88 and that’s a sticking point for Guilfoyle.
Revenue during the fourth quarter rose across all of its segments -- pharmacy services, retail/long-term care and health care benefits and expects full year 2022 adjusted EPS guidance of $8.10 to $8.30 while Wall Street estimates $8.27.
CVS revised the low end of its expected full year cash flow from operations of $12 billion to $13 billion, down from $12.5 billion to $13 billion.
Late last month, CVS said it will offer a new line of six home-health-care products aimed squarely at older Americans.
The company is focusing on new markets resulting from the aging of the American population: "There will be more than 70 million Americans ages 65 and older by 2030, along with millions of caregivers and other customers who need these types of products because of illness or while recuperating from an accident," CVS Vice President Brenda Lord said in a statement.
