So a financial analyst gave a bullish outlook for Cvs stock and said there is a 40% upside potential to the stock and set a $76 price target for the stock. He basically said he likes the direction Cvs is going, (healthcare), and hence his bullish outlook. HOWEVER he said that his good outlook is in spite of the fact that eventually all pr-scrip-ions will be done on-line. On-line scripts will be the death of Cvs, since their entire business model is built on you getting your script in the store. Cvs is not Amazon and does not do online scripts yet. So if people move from the pharmacy store to the online pharmacy then it’s bye, bye cvs!
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The current and upcoming business model is based on the local retail location. While there are things like multi dose, mail order or delivery from different paths in the company; the goal is driving customers into the pharmacy business and to buy the high margin front store things. The PBM is a key driver and your metics in the RX is a way to sell the PBM. Some of the new services can be viewed as high cost loss leaders in a goal to sell the overall business and PBM/Atena plan.
If a contract is signed with all of the employees for verizon for example the guaranteed payout is well worth the loss of a potential losing program such as optometry or the Minute clinic. The whole goal is to dominate the sector.
However don't forget that sears dominated for decades and stuck with their massive catalogue instead of going after online sales upfront and being innovative. The moves by CVS are not innovative but defensive.
If cvs got out of the retail end of the business, I don't think they could survive if it were, just Caremark, Omnicare, Aetna. Retail is what drives the cvs brand name. When people think about CVS very few people probably know about cvs' other business entities outside of investors. People know cvs for their cvs pharmacy stores. So, if those retail store pr-scrip-ions were to go somewhere else, think amazon via pillpack, then YES cvs would be in trouble.
Except when the average consumer thinks “cvs” they think stores, not Caremark.
You are an id--t cvs Caremark mail order is one of the biggest mail orders in the country.
If bullish is recovering what we just lost in 3 weeks we’ll its more bull sh--