CVS
CVS Health Corp.
$92.36
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 42.7% above fair value
You pay
$92.36
Bear
$51.79
Fair
$64.74
Bull
$77.69
Bear
$51.79
-43.9%
$4.68 × 11x P/E
Fair
$64.74
-29.9%
$4.68 × 14x P/E
Bull
$77.69
-15.9%
$4.68 × 17x P/E
Adjust Assumptions
13.8x
4.68$
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
19.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$111.25
Divergence from AlphaVal
42%
Summary
Applying a 14x P/E to adjusted EPS of $4.68, the base-case value is $64.74 per share. DDM cross-check: $66.91.
Warnings
The company's reported profits differ from official accounting profits by 237%. Check what costs are being left out of the adjusted number.
The company pays out 191% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $111.25 (from 41 analysts). Our estimate is 42% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples