Moody's Lowers CVS Caremark Outlook

Moody's Investor Service lowered its outlook on pharmacy benefits provider and drug store operator CVS Caremark (NYSE: CVS) to "stable" from "positive" saying upgrades aren't likely until the Caremark unit can show it has stemmed the tide of lost contracts it has been suffering in recent months.

The Caremark business has lost $4.8 billion in pharmacy benefits contracts in recent months and that could crimp the unit's profits by 10%-12% in 2010.

Moody's said contract losses for Caremark are not expected to have much effect on the company's credit. Caremark is one of the largest pharmacy benefits managers for employers in the U.S.