CVS Health Corporation (CVS)
Healthcare · NYQ · US
Fundamentals
Valuation and ratings
CVS Health Corporation trades at USD106.50, which is 16% above the USD89.32 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 30 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 45.6 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About CVS Health Corporation
CVS Health Corporation provides health solutions in the United States. The Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services, including medical, pharmacy, dental, and behavioral health plans; medical management capabilities; Medicare Advantage and Medicare Supplement plans; prescription drug plans (PDPs); and Medicaid health care management services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. The Health Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, specialty and mail-order pharmacy, clinical services, disease management, medical spend management services, and pharmacy and other administrative services. It serves employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, CMS, plans offered on public health insurance exchanges, and other sponsors of health benefit plans. The Pharmacy & Consumer Wellness segment sells prescription and over-the-counter drugs, consumer health and beauty products, personal care products, and other general merchandise products. This segment also distributes prescription drugs; and provides related pharmacy consulting and other ancillary services to care facilities and other care settings. It operates online retail pharmacy websites, retail specialty pharmacy stores, and compounding pharmacies, as well as branches for infusion and enteral nutrition services. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was founded in 1963 and is headquartered in Woonsocket, Rhode Island.
CVS passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
27 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Dodge & Cox, DODGE & COX$3.72B · 2.0% of book
- Capital Research Global, Capital Research Global Investors$1.44B · 0.2% of book
- Richard Pzena, PZENA INVESTMENT MANAGEMENT LLC$989.18M · 3.2% of book
- Christopher Davis, DAVIS SELECTED ADVISERS$879.05M · 4.0% of book
- Larry Robbins, GLENVIEW CAPITAL MANAGEMENT, LLC$588.69M · 14.8% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is CVS Health Corporation (CVS) undervalued?
Against our discounted cash flow estimate of USD89.32, CVS at USD106.50 is 16% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own CVS?
27 of the institutions we track reported a position in CVS in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is CVS's P/E ratio?
CVS trades at 45.6 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for CVS, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.