CVS reaches an agreement with Walmart on the pharmacy benefits administration system

CVS Health Corp. (CVS) said on Friday it had reached an agreement for several years with Walmart (WMT) to maintain its network of retail pharmacies for Medicaid and its pharmacy benefit management systems after warning earlier this week that the two companies had separated.

CVS had argued that the Walmart fees required to maintain the system would result in higher drug prices for customers, but noted on Friday that the two parties had reached a "mutually acceptable solution," although the terms of the agreement were not disclosed. .

"We are pleased to have reached fair and equitable terms with CVS Caremark that are in the best interest of our customers, and we are pleased that our CVS Caremark customers can continue to save money and live better," said Sean, senior vice president at Walmart. Slovenski. "We believe in giving priority to our customers by providing value and keeping our low-priced daily promise."

CVS shares rose 3.4% on Friday to close at $ 65.52 after the contract was renewed, while shares of Walmart, the world's largest retailer, added 1% to end at $ 97, 73

Jim Cramer and his team of badysts at his Action Alerts PLUS club for investors had argued earlier this week that the dispute with Walmart does not alter the pending disruption of the industry facilitated by the integration of Aetna.

"For some earnings outlook, Cowen badysts estimated Walmart's exit will have an impact of $ 0.07 at most on the adjusted earnings of 2019, which is less than 1% of its current estimate of $ 7.50," the team wrote. . "And if the application of April 30, 2019 is agreed, Cowen estimates an impact of a maximum of $ 0.05 to 2019 adjusted earnings per share."

CVS reports on February 20.

"When we eliminate noise and intangible impacts, what we have left is an action that is quoted at a very convincing valuation," the team said. "The multiple of earnings below the consensus of 9x for 2019 reflects an excessive discount, and the yield of the dividend above 3% provides a great compensation for our patience in the integration process."

(This item has been updated with closing prices of shares).

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