CVS Health Corp. (NYSE: CVS) stock surged over 5% in pre-market trading on Thursday as the healthcare giant provided an upbeat outlook for 2025, driven by the expected recovery in its Aetna health insurance business.
The company reported mixed results for the fourth quarter of 2024, with revenue of $97.71 billion beating estimates but adjusted earnings per share (EPS) of $1.19 falling short due to continued pressure in the Healthcare Benefits segment. However, CVS Health expressed confidence in its future performance, forecasting 2025 adjusted EPS of $5.75 to $6.00, which represents a significant improvement over the previous year.
The key driver behind this optimism is the anticipated turnaround in Aetna's operations, particularly in the lucrative Medicare Advantage market. CVS Health's new CEO, David Joyner, highlighted the company's "deliberate approach" to Medicare Advantage bids and improved star ratings, which are expected to boost margins in this segment.
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