(Reuters) - CVS Health ( CVS ) investors will closely examine this week turnaround initiatives spearheaded by new CEO David Joyner and their impact on cost pressures in its health insurance business.

The healthcare conglomerate, which reports its fourth-quarter results on Wednesday, has missed earnings targets for the last three quarters and withdrawn its annual forecast, causing its shares to slump more than 40% in 2024.

"Unfortunately for CVS, we believe that every line of business has become incrementally more challenging," said Deutsche Bank analyst George Hill.

CVS owns a pharmacy benefit manager, a large insurance unit, and one of the largest U.S. retail pharmacy chains.

The challenges with higher costs will probably continue, and accelerate, said Leerink Partners analyst Michael Cherny.

CVS, like its peers, has faced elevated costs across its Medicare plans for people who are aged 65 and older, but the hit was more pronounced as the company enrolled the highest number of new members under the plans.

It reported a medical loss ratio - a percentage of premiums spent on medical care - at a record high of 95.2% in October, as Medicaid eligibility redetermination by states after the end of a pandemic-era policy added to insurers' costs.

But investors are now hoping for a change.

CVS, which underwent a top management reshuffle since Joyner's appointment in October, laid out major plans for cost cutting in November.

MANAGEMENT CREDIBILITY

Investors are keenly awaiting 2025 forecast and looking out for comments on healthcare demand trends, Medicaid rate adjustments as well as annual enrollment and pharmacy business performance.

In the past few years, CVS cut its annual forecasts a few times after issuing over-optimistic targets, which damaged its management's credibility and hurt its stock, said James Harlow, senior vice president at Novare Capital Management.

Analysts on average expect a 2025 profit of $5.96 per share, according to data compiled by LSEG.

Peers UnitedHealth and Elevance have warned of elevated costs to persist in 2025.

"I don't think the bar is that high, but people just want to see that it's not worse than what they had initially expected," said Jefferies analyst Brian Tanquilut.

(Reporting by Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli)