Executive Summary

• CVS Health reported that 4Q15 net sales rose by 11.0% year over year, to $41.1 billion, slightly above the consensus estimate of $41.0 billion.
• Diluted non-GAAP EPS rose by 26.5% year over year, to $1.53, which was in line with the consensus estimate and within the guidance range of $1.51–$1.55.
• Pharmacy sales grew by 11.1%, to $26.5 billion, driven by growth in specialty drugs and the recent $10 billion acquisition of pharmaceutical distributor Omnicare.
• The company reaffirmed its FY16 forecast of non-GAAP EPS of $5.73–$5.88, in line with consensus of $5.82. For 1Q, CVS expects non-GAAP EPS of $1.14–$1.17, slightly below the consensus estimate of $1.18.