The shares of struggling healthcare provider and pharmacy chain CVS Health dropped by more than 5% on Friday after the company made a CEO switch while issuing a warning that its quarterly earnings will fall short of expectations.
Karen Lynch, who led the company since 2021, will step down from her role as CEO “in agreement with the company’s Board of Directors,” with company veteran David Joyner taking over. Joyner previously served as vice president and the head of the pharmacy benefit manager at CVS Caremark.
“To build on our position of strength, we believe David and his deep understanding of our integrated business can help us more directly address the challenges our industry faces, more rapidly advance the operational improvements our company requires, and fully realize the value we can uniquely create,” said chairman Roger Farah in a statement.
Additionally, CVS Health slashed its projections for the third quarter earnings, which are set to be shared on November 6. It now expects its earnings per share to come between $1.05 and $1.10 per share, while Wall Street analysts expected $1.69 in EPS. The company is also projecting to fall short of its previous full-year guidance, which has been lowered three times since December 2023.
As a result, CVS Health stock has dipped by 5.23%, closing at $60.34 per share on Friday. The company’s shares are now down 25.37% year-to-date.