11:23 AM EDT, 10/18/2024 (MT Newswires) -- CVS Health ( CVS ) reduced its Q3 earnings estimates and pulled 2024 guidance citing the impact of a $1.1 billion charge related to premium deficiency reserves tied to the Medicare and individual exchange markets, Truist Securities said in a note on Friday.

This charge led to a $0.63 headwind on adjusted EPS and the premium deficiency reserves will largely be released in Q4, according to the note.

Truist said that CVS took an additional $1.16 billion charge related to 2025 store closures and prior cost-cutting measures, while medical utilization exceeded expectations.

Due to these challenges, CVS' preliminary Q3 adjusted earnings per share of between $1.05 and $1.10 fall significantly below the consensus of $1.69, the firm added.

"Management no longer believes prior 2024 guidance...to be an appropriate bogey given continued elevated utilization pressure," Truist said.

The firm expects the leadership transition with David Joyner's appointment as the new president and CEO to be smooth given his extensive experience in the healthcare and pharmacy benefit management sector.

The firm reiterated its buy rating on CVS' stock with a price target of $76.

Shares of the company fell past 8% in recent trading.

Price: 58.26, Change: -5.41, Percent Change: -8.50