CVS Health CEO Larry Merlo to step down next year

In this news, we discuss the CVS Health CEO Larry Merlo to step down next year.

(Reuters) – Larry Merlo, CEO of CVS Health Corp, to retire after a decade at the helm of the company during which he led the $ 69 billion acquisition of one of the world’s oldest health insurers Americans, Aetna.

Karen Lynch, who was with Aetna at the time of the acquisition in 2018, will succeed Merlo in February, CVS said on Friday. Lynch, 57, has worked for Aetna for eight years and was previously president of Magellan Health Services.

The CVS-Aetna merger was the vision of Merlo, 64, who wanted to offer more medical and testing services in CVS’s HealthHub stores nationwide. The leading pharmaceutical operator aims to have 600 of these stores by the end of the year and 1,500 next year.

“Investors will likely view this transition positively because Karen Lynch is highly respected by the investment community,” Evercore ISI analysts said in a client note.

Shares of the company, which raised its full-year profit forecast on Friday after beating analysts’ estimates for quarterly earnings, rose 4.1%.

The company said it has administered more than 6 million COVID-19 tests since March and expects to play an “important role” in COVID-19 vaccinations, once the vaccines become available; a handful are in the late testing phase.

CVS and rival Walgreens have partnered with the U.S. government to offer over-site vaccinations for residents of nursing homes and assisted living facilities. CVS should also provide vaccines in its pharmacies.

In the third quarter, the company saw same-store drugstore sales rise 6.7%, helping it beat Wall Street estimates for profits.

CVS gained $ 1.66 per share on an adjusted basis, beating the average analyst estimate of $ 1.33 per share, according to IBES data from Refinitiv.

CVS increased its guidance for adjusted earnings per share for 2020 to $ 7.35 to $ 7.45, from $ 7.14 to $ 7.27 previously.

Report by Manas Mishra in Bengaluru; Edited by Shinjini Ganguli

Original © Thomson Reuters

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