Now trading at a price of $71.47, CVS Health has moved 1.4% so far today.
CVS Health returned losses of -24.9% last year, with its stock price reaching a high of $107.26 and a low of $66.34. Over the same period, the stock underperformed the S&P 500 index by -29.0%. As of April 2023, the company's 50-day average price was $71.95. CVS Health Corporation provides health services in the United States. Based in Woonsocket, RI, the large-cap Consumer Staples company has 219,000 full time employees. CVS Health has offered a 3.2% dividend yield over the last 12 months.
The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $256,776 | $268,706 | $292,111 | $322,467 |
| Gross Margins | 17.7% | 18.2% | 17.8% | 16.9% |
| Operating Margins | 4.7% | 5.2% | 5.1% | 5.0% |
| Net Margins | 2.58% | 2.67% | 2.71% | 1.34% |
| Net Income (MM) | $6,634 | $7,179 | $7,910 | $4,311 |
| Net Interest Income | -$3,035,000 | -$2,907,000 | -$2,503,000 | -$2,287,000 |
| Depreciation & Amort. | -$4,371,000 | -$4,441,000 | -$4,512,000 | -$4,224,000 |
| Earnings Per Share | $5.08 | $5.46 | $5.95 | $3.01 |
| EPS Growth | n/a | 7.48% | 8.97% | -49.41% |
| Diluted Shares (MM) | 1,305 | 1,314 | 1,329 | 1,282 |
| Free Cash Flow (MM) | $10,391 | $13,428 | $15,745 | $13,450 |
| Capital Expenditures (MM) | -$2,457 | -$2,437 | -$2,520 | -$2,727 |
| Net Current Assets (MM) | -$107,977 | -$104,645 | -$97,610 | -$90,873 |
| Current Ratio | 0.94 | 0.91 | 0.88 | 0.95 |
| Long Term Debt (MM) | $64,699 | $59,207 | $51,971 | $50,476 |
| Net Debt / EBITDA | 3.92 | 3.42 | 2.77 | 3.32 |
CVS Health has growing revenues and a flat capital expenditure trend, a steady stream of strong cash flows, and average operating margins with a stable trend. However, CVS Health has slimmer gross margins than its peers, declining EPS growth, and a highly leveraged balance sheet.
CVS Health's Valuation Is in Line With Its Sector Averages:
CVS Health has a trailing twelve month P/E ratio of 23.9, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $8.91, the company has a forward P/E ratio of 8.1. CVS Health's PEG ratio is 2.66 on the basis of the 9.0% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. In contrast, the market is likely undervaluing CVS Health in terms of its equity because its P/B ratio is 1.28 while the sector average is 4.29. The company's shares are currently trading -8.7% below their Graham number.
Analysts Give CVS Health an Average Rating of Buy:
The 22 analysts following CVS Health have set target prices ranging from $76.0 to $143.0 per share, for an average of $98.18 with a buy rating. As of April 2023, the company is trading -26.7% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
CVS Health has a very low short interest because 1.2% of the company's shares are sold short. Institutions own 82.6% of the company's shares, and the insider ownership rate stands at 0.18%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 9% stake in the company is worth $8,313,418,701.
