CVS Health (CVS) AI Stock Analysis

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CVS Health

(NYSE:CVS)

Rating:79Outperform

Price Target:

$80.00

▲(20.12%Upside)

CVS Health's strong technical indicators and positive earnings call sentiment are the most significant factors driving its stock score. Despite some financial and industry challenges, the company's strategic execution and market positioning remain robust, securing a solid overall stock score.

Positive Factors

Acquisition Strategy

CVS file buys of Rite Aid stores are seen as a positive and prudent use of capital, providing high return on investment given the solid margin contribution.

Strategic Growth

The acquisition of new store locations in areas where CVS is under-represented geographically is seen as a strategic move.

Negative Factors

Earnings Uncertainty

Uncertainty around earnings quality is likely a reason for CVS's modest underperformance.

Regulatory Challenges

CVS was down in the after-market due to news of additional CMS audits of Medicare Advantage plans.

CVS Health (CVS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$88.02B

Dividend Yield3.82%

Average Volume (3M)7.10M

Price to Earnings (P/E)16.6

Beta (1Y)0.54

Revenue Growth4.84%

EPS Growth-26.54%

CountryUS

Employees219,000

SectorHealthcare

Sector Strength47

IndustryMedical - Healthcare Plans

Share Statistics

EPS (TTM)2.25

Shares Outstanding1,265,019,400

10 Day Avg. Volume7,356,782

30 Day Avg. Volume7,102,639

Financial Highlights & Ratios

PEG Ratio1.10

Price to Book (P/B)1.09

Price to Sales (P/S)0.00

P/FCF Ratio14.17

Enterprise Value/Market Cap1.76

Enterprise Value/Revenue0.10

Enterprise Value/Gross Profit2.92

Enterprise Value/Ebitda2.60

Forecast

1Y Price Target

$80.18

Price Target Upside20.39% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering18

CVS Health Business Overview & Revenue Model

Company DescriptionCVS Health Corporation is a leading American healthcare company that operates across multiple sectors, including retail, pharmacy, and health services. The company is headquartered in Woonsocket, Rhode Island, and is one of the largest pharmacy chains in the United States. CVS Health provides a wide array of services and products such as prescription medications, over-the-counter drugs, health and wellness products, and a range of healthcare services through its retail locations, online platforms, and its subsidiary Aetna, a health insurance provider.

How the Company Makes MoneyCVS Health generates revenue through several key streams. The primary source of income is its retail and pharmacy operations, where it sells prescription medications as well as a wide range of health and beauty products, general merchandise, and convenience items. Another significant revenue stream comes from its pharmacy benefit management (PBM) services, which include managing drug benefit programs for insurance companies and other clients. Additionally, CVS Health benefits from its health insurance segment, Aetna, which provides health insurance plans and services to individuals and businesses. The company's MinuteClinic locations offer various health services, further diversifying its revenue. Strategic partnerships with healthcare providers and insurers, as well as initiatives in digital health and telemedicine, also contribute to its earnings.

CVS Health Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Breaks down sales across different business units, revealing which areas contribute most to growth and where the company might face challenges or opportunities.

Chart InsightsCVS Health's revenue growth across all segments is robust, with the Health Care Benefits and Health Services segments showing significant year-over-year increases, reflecting strong market demand and strategic execution. The Pharmacy and Consumer segment also saw double-digit growth, driven by increased prescription volumes. However, challenges like exiting the individual exchange business and legislative impacts in Arkansas could pose risks. Despite these hurdles, CVS's increased EPS guidance and strategic partnerships, such as expanding GLP-1 access, underscore its commitment to innovation and market leadership.

Data provided by:

Main Street Data

CVS Health Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: -0.16%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

CVS Health delivered strong financial results in Q1 2025 and increased its full-year EPS guidance, reflecting solid performance across all segments. The company is leading in market innovation with expanded access to GLP-1 medications and growth in pharmacy market share. However, challenges persist in individual exchange products, legislative impacts in Arkansas, and elevated medical cost trends. The overall sentiment is cautiously optimistic with strong highlights, but significant lowlights remain.

Q1-2025 Updates

Positive Updates

Strong Financial Performance in Q1 2025

CVS Health reported first quarter adjusted earnings per share of $2.25 and adjusted operating income of $4.6 billion. Revenue for the quarter was nearly $95 billion, marking a 7% increase over the prior year.

Increased Full Year 2025 EPS Guidance

The company raised its full year 2025 adjusted EPS guidance to a range of $6 to $6.20, up from the previous range of $5.75 to $6, reflecting solid performance and execution across all business segments.

Expansion in GLP-1 Access

CVS announced a partnership with Novo Nordisk to increase access to Wegovy for members at a more affordable price, demonstrating the value of its integrated model and continuing leadership in market innovation.

Pharmacy Market Share Growth

Retail pharmacy script share in Q1 grew to approximately 27.6%, an increase of approximately 70 basis points from the same period last year, driven by strong execution and superior customer experiences.

Successful Leadership Transition

The appointments of Brian Newman as Chief Financial Officer and Amy Compton-Phillips as Chief Medical Officer are expected to support continued momentum and strategic execution.

Negative Updates

Challenges in Individual Exchange Products

CVS experienced continued underperformance from individual exchange products and plans to exit the states where Aetna independently operates ACA plans effective 2026, citing no near or long-term pathway for improvement.

Impact of Arkansas Legislation

Legislation in Arkansas could disrupt access to CVS pharmacies for thousands of patients, potentially increasing costs for employers and consumers, and affecting more than 10,000 people with complex conditions.

Elevated Medical Cost Trends

Medical cost trends remained high, especially in Medicare, including in-patient, outpatient, and medical pharmacy categories, although there are early signs of stabilization.

Potential Vaccine Demand Impact

CVS is monitoring potential changes in consumer sentiment towards vaccines that may impact market demand, particularly concerning COVID-19 vaccines.

Company Guidance

During the CVS Health Q1 2025 earnings call, the company reported a strong financial performance, with first quarter adjusted earnings per share (EPS) of $2.25 and adjusted operating income of $4.6 billion. CVS Health increased its full-year 2025 adjusted EPS guidance to a range of $6 to $6.20, up from the previous range of $5.75 to $6. The company generated nearly $95 billion in revenue, a 7% increase year-over-year, driven by growth across all segments. The healthcare benefits segment generated nearly $35 billion in revenue, an 8% increase, while the health services segment saw revenues of over $43 billion, reflecting an 8% growth. The pharmacy and consumer wellness segment recorded nearly $32 billion in revenues, an 11% increase compared to the prior year. CVS also processed and dispensed over 1.7 billion prescriptions annually, with a 7% increase in same-store prescription volumes. However, the company is exiting the individual exchange business in 2026, projecting variable losses of $350 million to $400 million for 2025. CVS Health remains committed to innovation and improving healthcare access and affordability through strategic partnerships and digital solutions.

CVS Health Financial Statement Overview

Summary

CVS Health demonstrates strong revenue growth with stable profitability margins. However, challenges include increasing operational costs and leverage risks, as well as decreased free cash flow due to capital expenditures. Despite this, the company maintains a solid equity position and continues to generate positive cash flow.

Income Statement

Positive

CVS Health demonstrates strong revenue growth with a 17.5% increase from 2022 to 2025 TTM. The company's gross profit margin and net profit margin are stable, reflecting robust operational efficiency. However, the decline in EBIT margin from 2023 to 2025 TTM indicates rising operational costs. Despite this, EBITDA margin remains favorable, showcasing consistent earnings before major deductions.

Balance Sheet

Positive

The balance sheet reflects a solid equity base with an equity ratio of approximately 30% in 2025 TTM, suggesting financial stability. However, the debt-to-equity ratio is relatively high at 1.06, indicating leverage risks. ROE is healthy, demonstrating efficient use of shareholder funds to generate net income.

Cash Flow

Positive

CVS Health shows stable cash flow generation, with positive free cash flow and a high operating cash flow to net income ratio. However, free cash flow has decreased from 2022 to 2025 TTM, reflecting increased capital expenditures and potential challenges in maintaining cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	378.96B	372.81B	357.78B	322.47B	292.11B	268.71B
Gross Profit	53.24B	51.40B	54.43B	54.50B	52.12B	49.05B
EBITDA	14.82B	13.68B	18.20B	12.35B	17.53B	17.12B
Net Income	5.28B	4.61B	8.34B	4.31B	8.00B	7.18B
Balance Sheet
Total Assets	255.59B	253.22B	249.73B	228.28B	233.00B	230.72B
Cash, Cash Equivalents and Short-Term Investments	12.65B	10.99B	11.46B	15.72B	12.53B	10.85B
Total Debt	81.21B	82.92B	79.39B	70.73B	76.00B	85.04B
Total Liabilities	178.47B	177.49B	173.09B	156.51B	157.62B	161.01B
Stockholders Equity	76.93B	75.56B	76.46B	71.47B	75.08B	69.39B
Cash Flow
Free Cash Flow	5.94B	6.33B	10.39B	13.45B	15.74B	13.43B
Operating Cash Flow	8.76B	9.11B	13.43B	16.18B	18.27B	15.87B
Investing Cash Flow	-6.28B	-7.61B	-20.89B	-5.05B	-5.26B	-5.53B
Financing Cash Flow	-2.24B	-1.14B	2.68B	-10.52B	-11.36B	-7.70B

CVS Health Technical Analysis

Technical Analysis Sentiment

Positive

Last Price66.60

Price Trends

50DMA

65.10

Positive

100DMA

65.03

Positive

200DMA

59.60

Positive

Market Momentum

MACD

1.07

Negative

RSI

51.41

Neutral

STOCH

65.36

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVS, the sentiment is Positive. The current price of 66.6 is above the 20-day moving average (MA) of 66.43, above the 50-day MA of 65.10, and above the 200-day MA of 59.60, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 51.41 is Neutral, neither overbought nor oversold. The STOCH value of 65.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CVS.

CVS Health Risk Analysis

CVS Health disclosed 47 risk factors in its most recent earnings report. CVS Health reported the most risks in the "Ability to Sell" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

CVS Health Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	79 Outperform	$88.02B	16.62	7.00%	3.82%	4.84%	-26.54%
HUM	77 Outperform	$30.48B	17.86	10.09%	1.40%	10.09%	-12.18%
UNH	73 Outperform	$295.85B	13.63	24.33%	2.71%	8.34%	45.24%
CNC	71 Outperform	$28.19B	8.43	12.59%	―	8.85%	33.30%
CI	71 Outperform	$89.33B	18.53	12.37%	1.81%	24.65%	48.38%
ELV	71 Outperform	$89.42B	15.44	14.24%	1.73%	6.63%	-3.26%
Sector *	49 Neutral	AU$2.48B	4.33	-64.25%	2.85%	36.51%	13.14%

* Healthcare Sector Average

Performance Comparison

CVS

CVS Health

66.60

12.48

23.06%

CNC

Centene

33.78

-32.59

-49.10%

Cigna

320.39

6.88

2.19%

HUM

Humana

243.79

-120.18

-33.02%

UNH

UnitedHealth

307.56

-171.41

-35.79%

ELV

Elevance Health

350.25

-171.81

-32.91%

CVS Health Corporate Events

Executive/Board ChangesShareholder Meetings

CVS Health Elects Board at Annual Meeting

Neutral

May 20, 2025

At the CVS Health Corporation Annual Meeting of Stockholders held on May 15, 2025, all 13 nominees for the Board of Directors were elected for a one-year term. The stockholders approved the ratification of Ernst & Young LLP as the independent registered public accounting firm for 2025 and the advisory approval of executive compensation. However, a stockholder proposal to reduce the threshold for stockholder rights to act by written consent was not approved.

The most recent analyst rating on (CVS) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on CVS Health stock, see the CVS Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy

CVS Health Announces Key Leadership Changes

Positive

Apr 8, 2025

On April 7, 2025, CVS Health announced key leadership changes effective in May 2025. Brian O. Newman was appointed as the Executive Vice President and Chief Financial Officer, succeeding Thomas F. Cowhey, who will transition to a strategic advisor role. Additionally, Amy L. Compton-Phillips was named Executive Vice President and Chief Medical Officer. These appointments are part of CVS Health’s strategy to enhance its leadership team and continue its growth in delivering health care services to millions of Americans.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 02, 2025