Opinions The Monthly Gems by Allan Tong
CVS Health CorpCVSTOP PICKDec 02, 2022
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Bought at less than 10x earnings with recent dividend increase is good for share price appreciation. Recent M&A also good for investors. Will continue to own shares. Excellent management team and solid dividend. Weakness is sector creating opportunities to buyout competitors.
Mike VinokurPrice target was raised today. This peaked in 2020-1 then was hit with a lot of bad news, like doubts over Signify and Oak Street acquisitions. But that negative sentiment has reversed, like their Medicare Advantage stars rating has gone up, and the street sees profitability rising in their pharmacy benefits management system, based on a new model last month. Trades under a cheap PE and pays a 3% dividend. He targets over $100 in 12 months. Is underloved and over-owned.
Jim Lebenthal
Healthcare has lagged this year. They run a chain of pharmacies, Aetna health insurance, pharmacy management and recently bought Oak Health. The CEO is doing a great job, and shares are not expensive around 8.5x PE. They took one some debt to bought some companies, but once they integrated them, it will ramp up cash flow.
(Analysts’ price target is $87.45)Mike Vinokur
Very large acquisition in health clinics. Pharmacy side of business struggling. Becoming a major healthcare provider in USA. Trading at 8x earnings. Cash flow excellent. Good for long term investors. Will continue to hold. Strong management team.
Lorne SteinbergLikes their diversity within US healthcare: insurance, pharmacy benefits and of course drug stores. They bought Signify and Oak Street which will be additive. CVS will definitely perform. Trades at a very low PE of under 8x and produces a ton of cash. Be patient with CVS.
Gordon ReidInsider selling earlier this year. One of its insurers pulled back on commitments. Very strong brand in the US, one of the largest, which puts a moat around it. Aging population will need more healthcare. Too cheap to ignore right now.
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Diversified into a vertically integrated healthcare colossus. Aetna business is weighing them down, but could be temporary. Compelling 8x earnings, very cheap, well capitalized, nice dividend. As long as Americans need healthcare, CVS will be part of that.
Brian Madden
Very positive on company.
Integrated healthcare company.
Demand for healthcare rising steadily.
Current share price under valued.
Good for long term investors.
Untapped franchise potential.
Expecting 10-12% share price growth.
Gordon ReidPremium content
CVS hopes to close the deal early next year, but ultimately Washington will decide whether to greenlight it or not. Another caveat is that CVS reported a $3 billion loss in early November to cover its share of the global opiod epidemic. ESG investors may be turned off this point, but CVS's Q3 earnings did blow past the street's estimates, with a reported EPS of $2.09 vs. an expected $1.99. Its Health Care Benefits segment as well as its pharmacy services revenues both rose 10% YOY while retail and long-term care climbed 7%. The company also raised its full-year forecast. Stockchaser Billy Kawasaki maintains a firm buy on CVS.