Assessing CVS Health (CVS) Valuation After a Strong 76% Year-to-Date Share Price Rebound

CVS Health (CVS) has quietly put up a strong run this year, with the stock up roughly 76% year to date and about 83% over the past year, drawing fresh attention from value focused investors.

See our latest analysis for CVS Health.

That surge in momentum has cooled slightly, with a modest 7 day share price return pullback. However, the year to date share price performance and 1 year total shareholder return still signal a market re rating around CVS Health’s earnings power and cash flow resilience.

If CVS’s rebound has you rethinking healthcare exposure, this could be a good moment to scan other opportunities across healthcare stocks for ideas that fit your portfolio.

With shares still trading at a sizable discount to analyst targets, but after a sharp rebound in recent months, is CVS Health now an undervalued cash flow story, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 15.9% Undervalued

With CVS Health last closing at $77.72 against a narrative fair value near $92, the valuation case leans toward meaningful upside backed by long term earnings power.

Progress on transforming pharmacy reimbursement with models like CVS CostVantage and increasing pharmacy market share (including acquisitions of Rite Aid scripts), combined with sustained pharmacy script growth, are setting the stage for more predictable revenue and a durable operating income base amidst ongoing front store and reimbursement pressures.

Read the complete narrative.

To understand what is really driving that upside gap, and why future revenue, margin recovery and earnings power are modeled so aggressively, read on.

Result: Fair Value of $92.44 (UNDERVALUED)

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

However, persistent Medicare Advantage margin pressure and structurally challenged front end retail trends could delay the earnings recovery that underpins the current undervaluation narrative.

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

Build Your Own CVS Health Narrative

If you see the outlook differently or prefer building your own view from the numbers, you can craft a personalized CVS Health story in minutes. Do it your way.

A great starting point for your CVS Health research is our analysis highlighting 4 key rewards and 4 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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