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CVS Health Corp CVS

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Stock XNYS Rating as of
$54.91 −0.83 (1.49%)
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Company Report

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CVS Facing Near-Term Headwinds in Medicare Advantage and PBM

Julie Utterback

CVS aims to be the most customer-centric health company in the United States and has spent over a decade positioning itself as a managed care leader, with the acquisitions of pharmacy benefit manager Caremark (2007), insurance provider Aetna (2018), and healthcare service provider Oak Street (2023) defining its strategic direction. CVS' top-tier retail pharmacy, health insurer, and PBM franchises create the potential to improve health outcomes and even bend the healthcare cost curve for its clients, especially if it can align incentives by owning healthcare service providers, as well.

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Price vs Fair Value

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CVS is trading within a range we consider fairly valued.
Price
$55.74
Fair Value
$25.00
Uncertainty
Medium
1-Star Price
$912.66
5-Star Price
$71.30
Economic Moat
Gryrs
Capital Allocation
Frbcwjvgb

Bulls Say, Bears Say

Bulls

CVS' diverse operations create the opportunity to view a patient more holistically by managing both medical and pharmacy benefits, which could lead to revenue and cost synergies for the organization.

Bears

Healthcare reform will likely remain a recurring political topic until universal, affordable coverage is achieved in the US, and CVS' stock may experience volatility if scenarios that threaten its prospects gain traction.

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Trading Information

Previous Close Price
$55.74
Day Range
$54.69–56.06
52-Week Range
$53.70–83.25
Bid/Ask
$54.91 / $55.05
Market Cap
$68.93 Bil
Volume/Avg
13.6 Mil / 10.9 Mil

Key Statistics

Price/Earnings (Normalized)
7.10
Price/Sales
0.20
Dividend Yield (Trailing)
4.56%
Dividend Yield (Forward)
4.77%
Total Yield
9.01%

Company Profile

CVS Health offers a diverse set of healthcare services. Its roots are in its retail pharmacy operations, where it operates over 9,000 stores primarily in the U.S. CVS is also the largest pharmacy benefit manager (acquired through Caremark), processing over 2 billion adjusted claims annually. It also operates a top-tier health insurer (acquired through Aetna) where it serves about 26 million medical members. The company's recent acquisition of Oak Street adds primary care services to the mix, which could have significant synergies with all its existing business lines.
Sector
Healthcare
Industry
Healthcare Plans
Stock Style Box
Large Value
Total Number of Employees
300,000
Website
https://www.cvshealth.com

Competitors

Valuation

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Metric
CVS
HUM
ELV
Price/Earnings (Normalized)
 7.1013.6215.55
Price/Book Value
 0.942.433.05
Price/Sales
 0.200.370.73
Price/Cash Flow
 5.8711.6513.76
Price/Earnings
CVS
HUM
ELV

Financial Strength

Metric
CVS
HUM
ELV
Quick Ratio
 0.54——
Current Ratio
 0.81——
Interest Coverage
 4.557.868.49
Quick Ratio
CVS
HUM
ELV

Profitability

Metric
CVS
HUM
ELV
Return on Assets (Normalized)
 4.07%5.46%7.36%
Return on Equity (Normalized)
 13.68%17.15%20.87%
Return on Invested Capital (Normalized)
 7.90%11.21%13.85%
Return on Assets
CVS
HUM
ELV
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Healthcare Plans Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
UNH
UnitedHealth Group IncWzhbzxhzfYjnhfh$460.9 Bil
ELV
Elevance Health IncNzcjskhvRqzrzb$124.6 Bil
CI
The Cigna GroupKqnqrnjvWlygcss$98.5 Bil
CNC
Centene CorpPzsprwknCpkdvcx$40.5 Bil
HUM
Humana IncXqmjbttkRmjprr$39.1 Bil
MOH
Molina Healthcare Inc—Mqctytf$20.5 Bil
OSCR
Oscar Health Inc Class A—Tvh$4.7 Bil
ALHC
Alignment Healthcare Inc—Ghvk$1.3 Bil
CLOV
Clover Health Investments Corp Ordinary Shares - Class A—Smcn$431.6 Mil

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