May 10, 2019

CVS – Given management’s confidence in their growth, generics, and HealthHUB expansion, bearish market expectations are unwarranted, and upside is likely


  • CVS Health Corporation (CVS:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 16.9x Uniform P/E. At these levels, markets are pricing in bearish expectations for the firm, which is unwarranted given management’s confidence in store comp sales growth, generics performance, and the potential of HealthHUB. As such, outperformance is likely justified
  • Specifically, management is confident in their front store comp sales growth, their ability to meet earnings progression expectations, improvements in generics performance, and the potential of their HealthHUB expansion project
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