People keep telling me I shouldn't be worried about CVS going the way of the dinosaur, but I'm not so sure. Much bigger companies have folded and no longer exist. Considering how things have been going lately, I don't think it's outside the realm of possibility that the same could happen to us.
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That term “too big to fail” is generally used to describe banks, oil companies, even to some degree the auto industry. All of these are critical to national security in one way or another. CVS, despite crazy high revenue numbers making us in the top 10 of Fortune companies, just doesn’t seem to have the same cache as ExxonMobil or JP Morgan Chase. Before CVS goes under, the profitable assets will simply be sold/spun off, and the brand would likely just go kaput before the government jumps in to save the company from failure. We’re just not THAT important in the grand scheme. These companies like CVS, United, Cigna, etc, have been preaching about changing healthcare and making it more affordable and effective for decades. They have little to nothing to show for results and simply don’t have the type of value prop for the country that a true too big to fail company does.
I think we’re a long way from failing - if anything we’d start to see the typical asset purging in an effort to prop up the financials temporarily. Do I see CVS as a going entity in 20 years? Possibly, but likely extremely different and maybe not even a fraction of the size of what it is today.
We need a wholesale cleansing of the ELT ranks and a likely focus on some core functions and out of some of this bloated ancillary BS that KL has expanded into. Anything is salvageable. Or we could be the next Sears.
Reading the annual reports are only helpful if they are factual. It’s well known that CVS is lying about the expected results of the Aetna segment. They continue to record fake “productivity” and cut jobs leaving the work on the shoulders of the sad sacks left behind. KL is tanking that company. But why should she care when she will get a golden parachute in the end anyway. She will just have more time for a book tour.
Losing half of its stock value is more an indication of failure than long term success.
@ord+1uEjoXjn If you are a stockholder, make sure you are diversified. No one company should be any more than 5% of your portfolio. That means if you get equity compensation (Director or above) or you buy stock through ESPP for the discount, SELL it and diversify when once it's no longer under the resting period. CVS stock may recover in the long-term, but it could also be a value trap for a very long time. Manage your risk.
It is a cannibalistic and toxic culture. KL is burying the company in debt through acquisitions and the government will bail out and takeover at some point to support socialized medicine and healthcare “equity.”
It is certainly not too big to fail. Amazon will destroy retail pharmacy. PBMs may be regulated out of business. The Medicare Advantage business is no longer profitable. AI will give rise to simple platforms for self insured commercial. There may be something left but it will be miniscule. The Harvard Case study will give the root cause as a culture of retaliation among individuals who are devoid of any trace of integrity.
NO cvs is not too big to fail. I actually think that it's very possible that in our lifetimes we could see CVS go under completely. I know it's a different company, but remember Sears was once the #1 retailer in the world, and look what happened to them. Now first off, I think the headwinds that cvs is facing are being downplayed too much. The headwinds in my opinion are stronger that what's being said publicly, and are having a greater effect on the overall financial strength of the company.
Also, there's too much debt being accrued by all these aquisitions, some of which aren't exactly doing so well right now, which puts further pressure on the bottom line. Too much pressure on PBM's right now and that's the big one. If Caremark gets broken up CVS is done. In addition, look at all the cutbacks being made. Hours cuts, store closures, executives being fired, layoffs, and by the looks of it, plenty more to come. Omnicare is bleeding money badly, and the list just goes on and on.
Everyone likes to say CVS is fine, my opinion is they're not. You just gotta take off the rose colored glasses and stop drinking there kool-aid, and you'll see that CVS is a sinking ship and KL has lost control.
To the below poster, the difference it makes is when you're not only an employee, but also a stockholder.
It's not too big to fail at all, especially not in the way that say, JP Morgan Chase is too big to fail. Also, there's a big difference between failing (meaning bankruptcy) and outperforming for shareholders or employees. However, the doomsday idea that CVS will implode and come crashing down in the next few years is laughable. Recent headwinds aside, CVS was Fortune 11 in 2023. It is enormous and well established.
If you really want to know how the business is doing, read the quarterly and annual reports. After a couple rounds of that, you'll understand how CVS makes money and when it's doing better and when it's... not. I am not saying CVS is doing everything right - it's not. But the grass isn't greener at many other companies out there. Other big companies in healthcare (and other industries) have layoffs, struggle to maintain margins, and get sued.
Anyway, this is kind of a moot point. Whether it's too big to fail or headed towards it's demise, what difference does it make for you? If you get an overall better offer from another company, you should take it. Otherwise don't worry about where CVS is heading because, other than doing your job well, there's nothing you can do about it.
More likely would be a break up, pbm & Aetna go one way, Retail/Pharmacy/MC go the other way. Pharmacy has such constant profit tho it funds all the other stuff CVS gets into, so you prob wont see it until investors think they can make a quick buck on it.