CVS (CVS) has announced that it has replaced its CEO Karen Lynch with longtime executive David Joyner, sending shares sinking in Friday's trading session.

Stephanie Davis, Barclays senior research analyst and managing director, joins Market Domination to discuss the leadership shakeup and what it means for CVS moving forward.

"I think the decision to put David Joyner in as CEO is probably the right one and the best one they can make right now. David has turnaround experience. He has a very straightforward pull-no-punches style that we saw in his internal memo to the company today. I think all of that is indicative of the directness that we're going to expect out of him and something that CVS really needs as they go into this next era," Davis tells Yahoo Finance.

While Joyner has stepped up into the roll, Davis notes that the biggest question now remains around who leads Aetna. "That leaves a pretty significant vacuum in a seat for Aetna, which is the entirety of what's been driving the downside for the past few quarters," she explains. The replacement should be announced by the end of 2024.

As some shareholders express concerns about Joyner's qualifications given his background in pharmacy benefit managers (PBM), Davis argues that the move is more about "someone who is a proven executive who has been with the organization for a very long time, who has done a turnaround, and will do a very good job of it given his past history."

She continues, "I also think it would be remiss not to mention what CVS has done with its PBM — much more creative and much more consumer-facing. Think about CostVantage. That couldn't happen, that level of consumer price transparency, without someone really taking a crucial look at the PBM."

Watch the video above to hear why Davis is still Overweight on CVS's stock.

To watch more expert insights and analysis on the latest market action, check out more Market Domination here.

This post was written by Melanie Riehl