1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Narrow-moat CVS Health turned in first-quarter results that beat FactSet consensus and raised its 2021 EPS outlook slightly. At first glance, we do not anticipate changing our $92 fair value estimate materially based on this announcement, but CVS shares still appear moderately undervalued, in our opinion.
Following its acquisition of Aetna in late 2018, CVS Health now provides an even more integrated healthcare-services offering for its members. Legacy CVS combined both the largest pharmacy benefit manager, processing over 2 billion adjusted claims annually, and a sizable pharmacy operation, including nearly 10,000 retail pharmacy locations primarily in the U.S. Adding a managed-care organization with over 23 million medical members gives the company a strong position in the insurance industry and should help CVS better control overall healthcare costs for its clients.
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