Now trading at a price of $73.1, CVS Health has moved 1.3% so far today.
CVS Health returned gains of 26.0% last year, with its stock price reaching a high of $73.22 and a low of $43.56. Over the same period, the stock outperformed the S&P 500 index by 10.9%. More recently, the company's 50-day average price was $65.85. CVS Health Corporation provides health solutions 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 3.7% dividend yield over the last 12 months.
Increasing Revenues but Narrowing Margins:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $256,776 | $268,706 | $292,111 | $322,467 | $357,776 | $372,809 |
| Operating Margins | 5% | 5% | 5% | 2% | 4% | 2% |
| Net Margins | 3% | 3% | 3% | 1% | 2% | 1% |
| Net Income (M) | $6,634 | $7,179 | $8,001 | $4,311 | $8,344 | $4,614 |
| Net Interest Expense (M) | $3,035 | n/a | $2,503 | $2,287 | $2,658 | $2,909 |
| Depreciation & Amort. (M) | $4,371 | $4,441 | $4,486 | $4,224 | $4,366 | $2,600 |
| Diluted Shares (M) | 1,305 | 1,314 | 1,329 | 1,323 | 1,290 | 1,262 |
| Earnings Per Share | $5.08 | $5.46 | $6.02 | $3.26 | $6.47 | $3.66 |
| EPS Growth | n/a | 7.48% | 10.26% | -45.85% | 98.47% | -43.43% |
| Avg. Price | $55.04 | $59.5 | $79.03 | $97.97 | $78.96 | $72.98 |
| P/E Ratio | 10.79 | 10.86 | 13.02 | 29.78 | 12.17 | 19.89 |
| Free Cash Flow (M) | $10,391 | $13,428 | $15,745 | $13,450 | $10,395 | $6,326 |
| CAPEX (M) | $2,457 | $2,437 | $2,520 | $2,727 | $3,031 | $2,781 |
| EV / EBITDA | 8.2 | 7.32 | 8.45 | 13.79 | 8.54 | 13.26 |
| Total Debt (M) | $68,480 | $64,647 | $56,176 | $52,254 | $61,410 | $64,151 |
| Net Debt / EBITDA | 3.84 | 3.09 | 2.63 | 3.23 | 2.94 | 5.0 |
| Current Ratio | 0.94 | 0.91 | 0.89 | 0.95 | 0.86 | 0.81 |
CVS Health suffers from weak operating margins with a negative growth trend, declining EPS growth, and positive cash flows. The firm's financial statements also exhibit not enough current assets to cover current liabilities because its current ratio is 0.81 and a highly leveraged balance sheet. On the other hand, the company has growing revenues and a flat capital expenditure trend working in its favor.
CVS Health Has Attractive Multiples and Its Shares Are Fairly Valued:
CVS Health has a trailing twelve month P/E ratio of 18.3, compared to an average of 25.91 for the Consumer Staples sector. Based on its EPS guidance of $6.48, the company has a forward P/E ratio of 10.2. The 3.5% compound average growth rate of CVS Health's historical and projected earnings per share yields a PEG ratio of 5.18. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing CVS Health in terms of its equity because its P/B ratio is 1.2 while the sector average is 3.03. The company's shares are currently trading 4.1% below their Graham number.
CVS Health Has an Analyst Consensus of Some Upside Potential:
The 24 analysts following CVS Health have set target prices ranging from $70.0 to $99.0 per share, for an average of $81.57 with a buy rating. The company is trading -10.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
CVS Health has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 88.1% of the company's shares, and the insider ownership rate stands at 1.07%, suggesting a large amount of insider shareholders. The largest shareholder is Blackrock Inc., whose 10% stake in the company is worth $8,968,396,120.
