CVS Health Corp. shares gained in premarket trading Wednesday after the health-care conglomerate projected strong 2020 sales, driven by growth in its pharmacy-benefit management business.

In an investor presentation, CVS said it sees 2020 revenue between US$261.97 billion to US$265.48 billion, above Wall Street analysts’ average expectation of US$256.89 billion.

Key Insights

• In the fourth quarter, the pharmacy-services segment brought in US$37.1 billion. In 2020, CVS expects the business will have revenue of US$137.50 billion to US$139.45 billion, more than the US$136.01 billion analysts expect. The business has been a cornerstone of CVS’s growth despite growing criticism of the industry’s role in pushing drug prices higher.

• CEO Larry Merlo said the company had a successful first year with recently acquired Aetna in the fold, while same-store sales for its pharmacy business rose 4.1 per cent year-over-year in the fourth quarter. By the end of 2020, CVS plans to complete up to 650 HealthHUBs, the company said in its presentation.

• However, a recent change on its board have raised some questions about the integration. Former Aetna CEO Mark Bertolini stepped down from CVS’s board last week, saying the company wouldn’t renominate him for another term.

Market Reaction

CVS shares gained 2.9 per cent in premarket trading in New York. The stock had gained 13 per cent over the past year through Tuesday’s close.