BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased CVS Health Corporation (“CVS” or the “Company”) (NYSE: CVS) securities between May 3, 2023 and April 30, 2024, inclusive (the “Class Period”). CVS investors have until September 10, 2024 to file a lead plaintiff motion.
Investors suffering losses on their CVS investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.
On August 2, 2023, CVS released its second quarter 2023 financial results, revealing that the Company was revising its diluted earnings-per-share (“EPS”) guidance range to $6.53 to $6.75 from $6.90 to $7.12, stating that operating income had decreased “primarily due to declines in the Health Care Benefits segment.” On this news, CVS’s stock price fell $2.04, or 2.7%, to close at $72.32 per share on August 3, 2023, thereby injuring investors.
Then, on November 1, 2023, CVS released its third quarter 2023 financial results and once again reduced its diluted EPS guidance range to $6.37 to $6.61 from $6.53 to $6.75.
Then, on February 7, 2024, CVS released its full year 2023 financial results, stating that, while operating income increased in 2023 compared to 2022, “[t]hese increases in operating income were partially offset by declines in the Health Care Benefits segment.” On this news, CVS’s stock price fell $0.96, or 1.3%, to close at $74.36 per share on February 8, 2024.
Then, on May 1, 2024, CVS released its first quarter 2024 financial results, stating that adjusted earnings for the year would be approximately $7 a share, down from previous expectations of at least $8.30. Additionally, the Company lowered its forecast for cash flow from operations by $1.5 billion. The Company cited increased medical costs in its Medicare insurance business as the cause of the lowered guidance.
On this news, CVS’s stock price fell $11.40, or 16.8%, to close at $56.31 per share on May 1, 2024, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the forecasts CVS used to determine plan premiums were ineffective at accounting for medical cost trends and health care utilization patterns; (2) as a result, CVS was likely to incur significant expenses to cover cost increases that were not accounted for in the Company’s forecasts and thus not covered by plan premiums; (3) accordingly, CVS had overstated the profitability of its Health Care Benefits segment; (4) contrary to Defendants’ assurances, the revenues generated from the Company’s other primary segments were insufficient to offset the negative financial impact of the increasing expenditures within the Health Care Benefits segment; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased CVS securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847 or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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