A Look at CVS Health’s Valuation After Closing 16 Oak Street Health Centers Due to Elevated Costs

CVS Health (CVS) is making some changes to its Oak Street Health portfolio by closing 16 senior-focused primary care centers. The company pointed to elevated medical costs as the reason and emphasized continued support for value-based care.

See our latest analysis for CVS Health.

While the news of Oak Street Health center closures has grabbed headlines, CVS Health’s share price tells a story of impressive resilience and renewed momentum. Following a 37% gain over the past 90 days and a remarkable 86% share price return year-to-date, the company’s long-term total shareholder return stands at nearly 50% for the past year, even as broader industry pressures have weighed on rivals.

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With shares climbing and optimism running high, the key question for investors remains: Is CVS Health undervalued at these levels, or has the market already priced in its future growth trajectory?

Most Popular Narrative: 4% Undervalued

Following a solid rally, CVS Health’s most widely tracked narrative fair value sits at $86.20 per share, a notch above its last close of $82.45. This narrow gap highlights growing optimism, but puts the spotlight on exactly what financial and strategic assumptions are driving this premium.

Integration of recent and ongoing acquisitions (such as Aetna, Oak Street, and Signify Health), as well as vertical alignment between insurance, pharmacy, and care delivery, provide substantial cross-selling and synergy opportunities. These factors support long-term operating margin and earnings growth as margin recovery initiatives gain traction.

Read the complete narrative.

Want to know the hidden formula behind CVS Health’s premium value? The narrative pivots on critical assumptions blending future earnings expansion with strategic business transformation. Unpack the bold forecasts and find out which levers could surprise investors in the years ahead.

Result: Fair Value of $86.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressure in key segments and ongoing reimbursement challenges could easily disrupt this optimistic trajectory for CVS Health’s earnings growth.

Find out about the key risks to this CVS Health narrative.

Build Your Own CVS Health Narrative

If you want to take a different perspective or independently review the numbers, it only takes a few minutes to craft your own narrative using real data, so why not Do it your way

A great starting point for your CVS Health research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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