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News Breaks
February 5, 2014
12:00 EDTCVS, PM, LO, MO, RAICVS plans to stop selling cigarettes and other tobacco products
CVS Caremark (CVS) earlier today announced its decision to cease selling tobacco at all locations starting October 1. WHAT'S NOTABLE: CVS Caremark said its choice to exit the tobacco category does not affect the company's 2014 segment operating profit guidance, 2014 earnings per share guidance, or the company's five-year financial projections. The company estimates that it will lose approximately $2B in revenues on an annual basis from the tobacco shopper, equating to approximately 17c per share. Given the anticipated timing for implementation of this change, the impact to 2014 earnings per share is expected to be in the range of 6c-9c per share. The company has identified incremental opportunities that are expected to offset the profitability impact, CVS added. WHAT'S NOTABLE: Deutsche Bank believes CVS Caremark's decision to stop selling tobacco products is in-line with its strategy to become more of a healthcare services company. Deutsche thinks the move could improve CVS' competitive positioning and it keeps a Hold rating on the stock. PRICE ACTION: During late morning trading, shares of CVS Caremark were down 1.5% to trade near $65. Like the broader S&P 500, shares of a number of tobacco product makers were generally lower. Philip Morris (PM) fell 0.88% to $76.20, Reynolds American (RAI) fell 0.7% to $47.17, Lorillard (LO) fell 2.5% to $47.64 and Altria Group (MO) fell 1.2% to $34.02.
News For CVS;PM;LO;MO;RAI From The Last 14 Days
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September 30, 2014
11:10 EDTCVSWalgreen slightly lower as pharmacy margin pressure continues
Shares of retail drugstore chain Walgreen (WAG) are down slightly after the company noted that it booked a non-cash loss of $866M in the fourth quarter and that it is continuing to endure pharmacy margin pressure. WHAT'S NEW: Walgreen reported Q4 adjusted EPS of 74c, which matched analysts' consensus. The company's Q4 revenue was $19.06B, which was only slightly higher than analysts $19.02B consensus. Customer traffic in Q4 comparable stores decreased 2.2% and basket size increased 3.5%, while total sales in comparable stores increased 5.4%. Walgreen said the quarter was negatively impacted by an $866M, or 90c per share, non-cash loss because it decided to exercise its option to buy the remaining stake in Alliance Boots early. In regards to its partnership with Alliance Boots, Walgreen said that it anticipates synergies of $650M in fiscal year 2015. Walgreen noted that it is moving forward with the implementation of its previously announced cost-reduction initiatives to achieve $1B in savings by the end of fiscal year 2017. The drugstore chain said that it will continue to work through pharmacy margin pressure. WHAT'S NOTABLE: During the company's conference call, Walgreen said that its generic drug inflation will be with the company "for awhile." The drugstore chain noted that inflation was the main headwind to pharmacy margins during the quarter. To combat this, Walgreen said it aims to focus on contracting strategy and will cut pharmacy costs by upping efficiencies. In terms of FY15, Walgreen said its tailwinds included an aging population, growth and chronic donations, new generics and consumerization of healthcare. The company says some headwinds during the quarter included reimbursement pressure, generic drug inflation, Medicare Part D Rate Step Down and the cautious consumer. The company anticipates closing the Alliance Boots partnership in calendar year 2015, as it works towards regulatory approvals and shareholder vote. Walgreen is looking to open an additional 1,000 stores to well-experience formats and foresees FY15 capital expenditures of $1.7B. First quarter interest expense is anticipated to be comparable to Q4 and Q1 tax rate of 30%. The company said that there won't be a material change in free cash flow in 2015. In August, Walgreen forecast fiscal year 2016 EPS of $4.25-$4.60 on revenue of $126B-$130B. At that time, Walgreen said the decision to buy the rest of Alliance Boots would not be an inversion transaction. The company previously said Timothy McLevish would succeed Wade Miquelon as executive vice president and Chief Financial Officer. PRICE ACTION: During morning trading, Walgreen fell 24c or 0.4%, to $59.36. Since its last earnings report, shares of the retail drugstore chain are down around 20%. OTHERS TO WATCH: Peers of Walgreen include Rite Aid (RAD), which is down 0.4% to $4.93, and CVS Health (CVS), which is relatively flat at $80.08.
07:45 EDTCVSJMP Securities to hold a conference
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September 29, 2014
06:41 EDTMO, LO, RAI, PMTobacco companies placing tough warnings on e-cigarettes, NY Times says
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September 26, 2014
13:53 EDTCVSCVS' Caremark to pay $6M to settle false claims allegations
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10:01 EDTPMOn The Fly: Analyst Downgrade Summary
Today's noteworthy downgrades include: Actuant (ATU) downgraded to Market Perform from Outperform at FBR Capital... Air France-KLM (AFLYY) downgraded to Underperform from Hold at Jefferies... Beacon Roofing (BECN) downgraded at Longbow... China Unicom (CHU) downgraded to Hold from Buy at Deutsche Bank... Erickson (EAC) downgraded at Stifel... H.B. Fuller (FUL) downgraded to Neutral from Overweight at Piper Jaffray... Philip Morris (PM) downgraded at BofA/Merrill... Seadrill (SDRL) downgraded to Sell from Neutral at Goldman... Starwood Property (STWD) downgraded to Neutral from Buy at Compass Point... Steel Dynamics (STLD) resumed with a Neutral from Buy at Citigroup... Vale (VALE) downgraded to Neutral from Buy at Citigroup.
10:01 EDTMOOn The Fly: Analyst Upgrade Summary
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08:04 EDTPMPhilip Morris downgraded at BofA/Merrill
As previously reported, BofA/Merrill downgraded Philip Morris to Neutral from Buy. The firm downgraded shares based on prolonged dollar strength and lingering economic issues in developed and emerging markets. Price target lowered to $87 from $91.
08:00 EDTMOAltria Group upgraded at BofA/Merrill
As previously reported, BofA/Merrill upgraded Altria to Buy from Neutral. The firm expects Altria to benefit from steady U.S. fundamentals given and believes it could monetize its beer exposure if AB Inbev acquires SABMiller, which Altria has an investment in. Price target raised to $50 from $44.
07:43 EDTPMPhilip Morris downgraded to Neutral from Buy at BofA/Merrill
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07:41 EDTMOAltria Group upgraded to Buy from Neutral at BofA/Merrill
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September 25, 2014
10:06 EDTCVSCVS Health management to meet with Leerink
Meeting to be held in Los Angeles on October 1 hosted by Leerink.
September 24, 2014
12:12 EDTMOIllinois Supreme Court grants review of the Price case
The Illinois Supreme Court granted review in the Price case to decide whether its 2005 dismissal of that case against Philip Morris USA should remain in place. In April, an intermediate state appellate court overturned a decade-old decision of the Illinois Supreme Court dismissing the Price case. The appellate court further held that, as a result of the case being reopened, the original judgment should be reinstated. That decision remains stayed while on appeal. In 2003, a Madison Circuit Court judge sitting without a jury found that Philip Morris USA had deceived Illinois smokers in purchasing Marlboro Lights and Cambridge Lights cigarettes and imposed a $10.1B judgment. In 2005, the Illinois Supreme Court reversed the judgment in favor of Philip Morris USA.
08:33 EDTCVSCVS Health enters into clinical affilitation with three academic medical centers
CVS Health has entered into new clinical affiliations with three leading academic medical centers. The collaborating medical centers include the University of Maryland Medical System, University of Texas Medical Branch at Galveston, and the University of Alabama at Birmingham Health System. Through these clinical affiliations the patients served by these medical centers will continue to have access to clinical support, medication counseling, chronic disease monitoring and wellness programs at CVS/pharmacy stores and MinuteClinic, the retail medical clinic division of CVS Health.
September 23, 2014
10:33 EDTCVSCVS Health management to meet with Wolfe Research
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September 22, 2014
07:58 EDTPMPhilip Morris estimates lowered on FX headwinds at Morgan Stanley
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September 19, 2014
09:53 EDTRAIRJ Reynolds Tobacco appoints Debra Crew Chief Commercial Officer
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07:22 EDTCVSNational Press Club holds a luncheon meeting
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September 18, 2014
11:55 EDTCVSRite Aid falls as drugstore chain trims FY15 view
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