CVS Health Corp (CVS) Buy, Sell or Hold

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CVS Health Corp (CVS)

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95.93

+1.11 (1.17%)

as of Jun 5, 2026, 8:00:00 pm Market Open.

247 watching

COMMENT

This hasn't been a name for them. They are focusing more on the retail side and he wants a more pure play on healthcare. They have developed their pharmacy benefit managers. At around 10x earnings, it's fairly inexpensive but their debt levels are fairly high. They are trying to vertically integrate.

HOLD

It has had a great move since June. It is going to run into resistance in the high $70 range. He thinks you should focus on companies that get a boost from a stronger economy. We have come off a mid-cycle slow down. Earnings growth at CVS-N is in the single digits but less likely to get a boost from a stronger economy. He thinks it will under-perform the general market over the next year.

BUY

She is worried about their leverage. They are doing a lot of interesting things with US healthcare. They want to do 50% of the things one can do at the family doctor. It seems like a compelling story. She thinks it will be a good multi-year run. (Analysts’ price target is $81.00)

BUY

CVS vs. Walgreens Prefers CVS. Walgreens missed their recent numbers. Walgreens is purely a pharmacy company, which faces competitive threats from Amazon and Walmart. In contrast, CVS is vertically integrated; they bought insurer Aetna for example. Pays a 3% yield. However, CVS did borrow heavily to buy Aetna, but generally CVS is in much better financial shape than Walgreens.

BUY

He is very positive on this one. They were stuck in the mud for a while, but their business plan is now coming into fruition. This is a company that is redefining health care in the US. No longer just a pharmacy, they are into health insurance and into benefits management. They have set up health hubs to serve people who do not have access to emergency medical needs. (Analysts’ price target is $81.54)

TOP PICK

They just did a huge acquisition, Aetna, and took on a lot of debt. CVS is well-positioned, because they cover the pharmacy side and pharma benefits sides. They will help reduce US medical costs. It trades at a cheap 10x earnings and boasts big dividend growth. A really cheap stock in any market. (Analysts’ price target is $80.73)

PAST TOP PICK

(A Top Pick Sep 17/19, Up 18%) There's a lot of uncertainty in the healthcare space in America and CVS plays a pivotal role. It trades at 10x earnings and pays an 8% free cash flow yield. It's vertically integrated and in a competitive position. This used to trade at 8x earnings. His limit is to buy at 10-10.5x earnings, so it's a hold for him now. They spend a ton of cash, but have a lot of cash flow. Hold if you own or buy on a pullback. The valuation offsets the uncertainty.

SELL

He used to own it. He had assumed earnings per share would continue to grow double digits. They were eventually not able to grow at a double digit rate and has been in a struggle since then. When it merged with other companies it has become difficult to forecast where the company is going to go.

HOLD

We have had a big run up. His model price is $79.37 so he would look more at Walgreens now.

BUY

He's recommended this when it was way lower at $54. The FMV is 90% higher than the current price. Has a decent balance sheet, but it faces resistance at $80. If it breaks that, $110 is the next target. CVS avoided getting accused by the US courts for opiate trafficking.

TOP PICK

One of largest healthcare companies in the US. Retail, pharma benefits, healthcare benefits. Defensive, attractive valuation. Yield is 2.67%. (Analysts’ price target is $79.28)

COMMENT

CVS vs WBA? He thinks CVS has more growth potential. Both have been relatively poor performers over the past couple of years. The main reason being there are too many pharmacies in the US. With Walmart, Costco and Target getting involved the competition is intense and putting pressure on margins. CVS is worthy of a look following the investment in AETNA, which is helping them diversify. Amazon is expected to enter the space soon.

BUY

WBA-Q vs. CVS-N. He just bought CVS-N. Walgreens is still the pure Walgreen - Boots alliance, pharmacy business, incredibly well run. CVS-N merged with Aetna on the benefits side. The risk on healthcare is always legislation. The US is aging like all western countries. They cover all the bases. Both companies are so well entrenched that it is hard to displace them.

DON'T BUY

It had a lift in August/September. But there was been no technical breakout. He would lean away from it.

PAST TOP PICK

(A Top Pick Oct 11/18, Down 13%) He sold it. They bought 2 different businesses, including insurer Aetna. This integration will help them grow. But this space is entering the US election cycle and will be targeted in 2020. Good cash flow and managers, though. Buy this on pullbacks.

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CVS Health Corp (CVS)