CVS Health Corporation (CVS) Stock Valuation — PE Analysis
Medical - Healthcare Plans · NYSE
Current Price
$101.96
PE Ratio (TTM)
44.3x
Intrinsic Value
$126.76
+19.6% margin of safety
COMPETITIVE MOAT
↑Integrated Healthcare Ecosystem
CVS Health's unique integration of retail pharmacies, PBM services, and health insurance creates a powerful ecosystem. This allows for cross-selling opportunities and data synergy, driving customer loyalty and operational efficiencies.
↑Scale and Network Effects
With a vast network of retail locations and a large member base across its insurance plans, CVS benefits from significant scale. This scale provides negotiating power with providers and suppliers, creating a barrier to entry for smaller competitors.
↑Brand Recognition and Trust
CVS has established a strong and trusted brand in the healthcare sector. This recognition fosters customer loyalty and makes it a preferred choice for individuals seeking pharmacy and health insurance services.
INVESTMENT RISKS
↓Intensifying Competition
The healthcare industry is highly competitive, with players like UnitedHealth Group leveraging AI for efficiency. CVS faces pressure from both traditional insurers and emerging tech-focused healthcare disruptors.
↓Regulatory and Policy Changes
Healthcare is subject to significant government regulation and policy shifts. Changes in reimbursement rates, drug pricing, or insurance mandates could negatively impact CVS's profitability and business model.
↓Rising Healthcare Costs
While recent trends show softer medical costs, the long-term trajectory of healthcare expenses remains a concern. Unexpected increases in medical utilization or costs could strain CVS's insurance margins.
Base case
CVS base case PE valuation
A base case PE valuation for CVS estimates a fair value of about $126.76 per share, against a current price of $101.96. The model assumes 12.7% annual earnings growth, a 44x target PE multiple, and a 10% discount rate.
Intrinsic Value
$126.76
Margin of safety
+19.6%
Expected annual return
+4.5%
Base case assumptions: 12.7% annual earnings growth, 44x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CVS PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for CVS Health Corporation respond.
Open PE Calculator for CVSCompany Overview
CVS Health Corporation is a prominent healthcare services provider operating across the United States. The company's Health Care Benefits division delivers a range of health insurance offerings, including traditional plans, voluntary coverage, and consumer-directed options, alongside associated services. Its diverse clientele spans employer organizations, private individuals, university students, part-time and hourly staff, various health plans, healthcare providers, government bodies, state-sponsored programs, labor unions, and individuals living abroad. Through its Pharmacy Services segment, CVS Health manages pharmacy benefits, offering comprehensive solutions such as designing and administering plans, managing drug formularies, overseeing retail pharmacy networks, and providing mail-order, specialty pharmacy, and infusion services. This segment also delivers clinical support and helps manage disease and medical expenditures. It serves a broad array of clients, including employers, insurance carriers, trade unions, government employee groups, health plans, prescription drug programs, Medicaid managed care organizations, and plans available on both public and private health insurance marketplaces, in addition to other health benefit plan sponsors and individual consumers. Operationally, this segment encompasses specialty retail pharmacies, specialty mail-order services, general mail-order dispensing pharmacies, compounding pharmacies, and facilities dedicated to infusion and enteral nutrition support. The Retail/LTC (Long-Term Care) segment is responsible for selling both prescription and over-the-counter medications, consumer health and beauty items, and personal care products. It also delivers healthcare services via its MinuteClinic walk-in medical clinics. Furthermore, this segment handles the distribution of prescription drugs and offers pharmacy consulting along with other supplementary services to long-term care facilities and various other care environments. As of December 31, 2021, CVS Health boasted approximately 9,900 retail outlets and 1,200 MinuteClinic locations. This network is complemented by online retail pharmacy platforms, LTC pharmacies, and on-site pharmacies. Originally established in 1963 and headquartered in Woonsocket, Rhode Island, the company was known as CVS Caremark Corporation before officially rebranding to CVS Health Corporation in September 2014.
Financial Metrics — CVS PE Stock Valuation Data
PE Ratio (TTM)
44.3x
PEG Ratio
n/m
Earnings Yield
2.26%
ROE (TTM)
3.9%
Revenue/Share (TTM)
$320.43
Dividend Yield
2.61%
Debt/Equity
1.01x
Frequently Asked Questions
What is the PE ratio of CVS?
The trailing twelve-month PE ratio of CVS reflects how much investors pay per dollar of CVS Health Corporation's earnings. This metric is most useful when compared to Medical - Healthcare Plans peers and the company's own historical range.
Is CVS overvalued based on PE ratio?
CVS's PE of 44.3x combined with a PEG ratio of -0.98 provides a growth-adjusted perspective. CVS has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Medical - Healthcare Plans, a DCF analysis may be more appropriate.
How do I value CVS stock using PE ratio?
To value CVS Health Corporation using PE: (1) Compare the current PE (44.3x) against the Medical - Healthcare Plans median to assess relative pricing, (2) check the PEG ratio (-0.98) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of CVS?
CVS's PEG ratio is -0.98, calculated by dividing the PE ratio (44.3x) by the expected earnings growth rate. Because CVS has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for CVS stock valuation?
PE ratio gives a quick relative read — how CVS is priced versus Medical - Healthcare Plans peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See CVS DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Healthcare valuationsP/E and DCF value CVS with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.