CVS Replaces CEO Karen Lynch with David Joyner as Earnings Miss; Shares Plunge 13%

Oct 18, 2024, 10:36 AM

CVS Health Corp. has appointed longtime executive David Joyner as its new President and Chief Executive Officer, replacing Karen Lynch who stepped down following a tumultuous tenure and an agreement with the board. The leadership change coincides with the company's warning of lower third-quarter earnings, citing medical cost trends exceeding prior projections, including a Medical Loss Ratio of 95% versus expectations of 91%. Preliminary Q3 adjusted earnings per share are expected to be between $1.05 and $1.10, significantly below estimates and the company's previous outlook issued in August. The healthcare giant is backing away from its 2024 guidance amid a hit to its Medicare Advantage business. Following the announcements, CVS shares sank as much as 13%, reflecting investor concerns over the company's financial performance and strategic direction.