Glenview Capital Issues Statement on CVS Health

Rhea-AI Summary

Glenview Capital reports significant progress in CVS Health's (NYSE: CVS) turnaround one year after establishing a major position, with shares generating a 25% total return since May 2024. Key improvements include: board refreshment with four new directors including Glenview's CEO Larry Robbins; leadership transformation under new CEO David Joyner; operational improvements exceeding earnings expectations; enhanced risk management through deleveraging; portfolio optimization; and progress toward potential share repurchases. Glenview has reduced holdings by 3.75 million shares for portfolio diversification but maintains CVS as its largest position. The firm remains confident in CVS's outlook, highlighting the company's role in serving 185 million people.

Positive

• 25% total return on investment since May 2024
• Board strengthened with four new directors and new Lead Independent Director
• Exceeded consensus earnings expectations in past two quarters
• Commitment to deleveraging and improved risk management
• Remains Glenview's largest position despite partial sale
• Increased annual guidance after Q1 results

Negative

• Suspension of material acquisitions
• Exit from certain business lines
• Glenview reduced holdings by 3.75 million shares

Insights

Investment Portfolio Strategist

Glenview Capital reports 25% returns on CVS investment while maintaining strong conviction despite partial position reduction to fund other opportunities.

Glenview Capital's statement outlines their substantial influence on CVS Health's ongoing transformation, having established a concentrated position one year ago that has generated a 25% total return. The hedge fund has exercised significant governance influence, securing board seats including one for CEO Larry Robbins, while implementing a comprehensive performance improvement plan that spans board refreshment, leadership transformation, and operational enhancements.

The 3.75 million share reduction appears to be normal portfolio management rather than a change in investment thesis, as they explicitly note CVS remains their largest position with "no plans for additional adjustments." This reduction aligns with internal diversification requirements and creates capital for other opportunities in the current volatile market environment.

The multi-faceted improvement plan Glenview helped implement shows early success, with CVS exceeding earnings expectations for two consecutive quarters. Strategic shifts include suspending material acquisitions, focusing on deleveraging, strengthening insurance reserves, and optimizing the business portfolio. The company has also progressed toward potentially resuming share repurchases, though this remains a future consideration rather than an immediate action.

Glenview's continued conviction despite taking some profits demonstrates confidence in the turnaround strategy, with the press release serving dual purposes: explaining position management to their own investors while affirming ongoing support for CVS's long-term prospects.

Healthcare Business Analyst

CVS shows measurable turnaround progress with exceeded earnings expectations, stronger leadership, and strategic shifts toward operational discipline.

CVS Health's transformation under new CEO David Joyner demonstrates tangible progress with the company exceeding consensus earnings expectations over the past two quarters and increasing annual guidance. The healthcare giant is executing a comprehensive turnaround strategy that balances immediate performance improvements with foundational changes to ensure long-term sustainability.

Several strategic shifts stand out: First, CVS has suspended material acquisitions to focus on deleveraging and strengthening insurance reserve levels - a significant change for a company that previously pursued growth through major transactions. Second, the company has begun rationalizing its portfolio, exiting or transitioning lines of business "where economics prevent a sustainable commitment to customers" while developing transparent solutions to reduce healthcare costs and complexity.

The leadership team has undergone significant transformation, combining internal promotion with external recruitment while strengthening a customer-centric, accountable culture. This people-focused approach complements the financial and operational improvements already underway.

With 185 million people served, CVS's scale creates significant opportunity for value creation if these initiatives continue gaining traction. The mention of "early signs of recovery across its businesses" indicates the turnaround remains in initial stages but is building momentum. The structured approach to governance, operations, and capital management demonstrates a comprehensive rather than piecemeal transformation strategy, with Glenview's continued substantial investment providing an important vote of confidence.

NEW YORK, May 6, 2025 /PRNewswire/ -- One year ago, we established a concentrated position in shares of CVS Health (NYSE: CVS). Since our purchases in May 2024, CVS shares have generated a total return of 25% reflecting initial progress in the long-term cultural and operational turnaround underway at the Company.  Our position size afforded us the scale necessary to constructively engage with the Board, Management, and fellow Shareholders in Q3 2024 on a multi-faceted performance improvement plan:

1. Board Refreshment – The Board welcomed four new Directors including Larry Robbins, Glenview's CEO, and recently appointed a strong Lead Independent Director.  The entire Board is operating cooperatively and cohesively;
   
   
2. Strengthening Culture and Leadership – CVS's leadership has undergone significant transformation under new CEO David Joyner's leadership, combining internal promotion with external recruitment while strengthening a customer-centric, accountable culture;
   
   
3. Operational Intensity – CVS exceeded consensus earnings expectations over the past two quarters and has seen operating strength and early signs of recovery across its businesses;
   
   
4. Risk Management – The Company has suspended material acquisitions, committed to deleveraging, strengthened its insurance reserve levels and established a clear path to sustainable returns on capital that will fuel future customer service and benefit stability;
   
   
5. Portfolio Enhancement and Innovation – CVS has exited or transitioned certain lines of business where economics prevent a sustainable commitment to customers while leading the industry with transparent and value-added solutions to reduce cost and complexity; and
   
   
6. Opportunistic Capital Deployment – In combination, CVS has marched closer to the time in which share repurchase can be both a responsible consideration and a creator of long-term shareholder value. 

Following healthy Q1 results and increased annual guidance, Glenview reduced its overall holdings by 3.75 million shares consistent with our fund's diversification parameters and to create buying power for further unique opportunities in this volatile macro environment. With this rebalancing, CVS Health remains our largest position, and we have no plans for additional adjustments to our CVS holdings.  Our confidence in the near, medium, and long-term outlook for CVS remains strong. 

We are grateful for the engagement and enthusiasm of the entire CVS Health team in the revitalization efforts well underway and are fully committed to making continued contributions to the vitality and long-term success of this iconic institution that strengthens the health of 185 million people.

Together we grow.

About Glenview Capital
In its 25th year of operations, Glenview Capital is a long-term investment partnership focused on fundamental investing.

Contact:
Keegan Bales
kbales@hstrategies.com

View original content:https://www.prnewswire.com/news-releases/glenview-capital-issues-statement-on-cvs-health-302447757.html

SOURCE Glenview Capital

FAQ

What changes has CVS Health (CVS) made to its board and leadership in 2024-2025?

CVS Health added four new directors including Glenview's CEO Larry Robbins, appointed a new Lead Independent Director, and underwent leadership transformation under new CEO David Joyner, combining internal promotions with external recruitment.

How has CVS stock performed since Glenview Capital's investment in May 2024?

CVS Health stock has generated a total return of 25% since Glenview Capital's investment in May 2024.

Why did Glenview Capital reduce its CVS holdings in 2025?

Glenview reduced holdings by 3.75 million shares for portfolio diversification and to create buying power for other opportunities in the volatile macro environment, while maintaining CVS as its largest position.

What operational improvements has CVS Health achieved under the new leadership?

CVS has exceeded consensus earnings expectations over the past two quarters, shown operating strength across businesses, committed to deleveraging, strengthened insurance reserve levels, and established a path to sustainable returns.

How many people does CVS Health serve as of 2025?

CVS Health serves 185 million people according to the statement.