Images

Image source: CVS Health.

Retail pharmacy giant CVS Health (NYSE:CVS) had a busy 2015. The company spent more than $14 billion on two huge acquisitions during the year that promise to greatly expand its already-huge presence in the growing healthcare sector. On the company's last earnings call with investors, CEO Larry Merlo predicted that these moves positioned CVS for "significant growth" in the fourth quarter.

Will CVS Health's actual results be able to live up to management's bullish forecast? Here are a few areas I think investors should pay attention to when results hit the wire.

Was this deal a bulls-eye?
First, investors should listen for updates on how CVS' $1.9 billion acquisition of Target's pharmacy and clinic business is going. CEO Merlo stated on the last earnings call that the Target acquisition will "enable us to reach more patients, add a new retail channel for our unique offerings, and expand convenient options for consumers."

Investors are not flying blind on this front -- we know the deal officially closed in the middle of December, and CVS has already stated that it will spend the first few quarters of 2016 converting the 1,672 Target pharmacies into its planed "store within a store" format. A few days ago, we learned that thus far, only a handful of Target's pharmacies had been converted to the new format, with the reminder being converted over the next few months. 

Investors should tune in to make sure the conversions are still on schedule.

Images

Image source: CVS.

How are legacy stores performing?
While the Target acquisition should give the company's retail numbers a shot in the arm, investors should keep an ear out for how its legacy stores are performing. Last quarter, same-stores sales ticked up by 1.7%, which is a decent result given that generic drug introductions and the company's decision to stop offering tobacco products continue to weigh on sales growth.

We already know CVS will pull back on its pace of new store openings as it devotes its internal resources to the Target store conversions, but that shouldn't slow down the company's plans to continue to roll out new MinuteClinics throughout its existing network of stores. The company already announced it plans to open another 500 clinics over the next two years. 

Investors should watch to see how same-store sales growth fared during the fourth quarter and confirm that the MinuteClinic rollout is proceeding according to plan.

How's the PBM business doing?
CVS Health's Pharmacy Benefits Management, or PBM, business also looks poised for growth. This segment grew a strong 10.3% last quarter on the back of an increase in its specialty pharmacy operations and pharmacy network claims, and that trend should only continue as the company's $12.9 billion acquisition of Omnicare continues to get brought into the fold. 

CVS already let us know that it added $11.5 billion worth of net new business during the year, and it retained 98% of its pharmacy benefit management clients. All told, this segment looks poised to once again contribute strongly to the company's top and bottom lines.

Add it all up
During its last earnings release, CVS Health narrowed its adjusted earnings per share guidance for 2015 to come in between $5.14 to $5.18, which implies its fourth-quarter adjusted earnings per share will be between $1.51 to $1.55. This implies healthy growth of at least 24% when compared to the same quarter last year.

Will actual results be able to live up to expectations? We'll have our answer on February 9th.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool recommends CVS Health. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.