CVS Health Inc CVS is considering restructuring to separate its retail and insurance businesses, facing investor pressure and a tough financial period.
The company’s EBITDA multiple is 7x, lower than competitors like UnitedHealth Inc UNH and Cigna Inc CI at 14x and 9x, respectively, indicating pressure to find a way forward.
Discussions involve possibly undoing CVS Health’s Aetna acquisition, exploring a split into two publicly traded companies pending board approval.
Hedge fund Glenview Capital Management plans to meet with CVS Health executives to discuss operational improvements, putting pressure on the company.
In the second quarter, the pharmacy chain reported adjusted EPS of $1.83, lower than the prior year but beating consensus, due to operating results in the Health Care Benefits segment.
CVS Health revised its adjusted EPS guidance to $6.40-$6.65 from $7.00, reflecting continued pressure in the Health Care Benefits segment.
Leadership changes have been made, with CEO Karen Lynch taking direct leadership of the Health Care Benefits segment.
CVS stock was up 2.21% at $64.27 during the premarket session.
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