CVS Health Corp. (CVS) Stock Valuation — PE Analysis
Medical - Healthcare Plans · NYSE
Current Price
$87.95
PE Ratio (TTM)
23.0x
Intrinsic Value
$83.24
-5.7% margin of safety
COMPETITIVE MOAT
↑Integrated Healthcare Ecosystem
CVS Health's unique integration of pharmacy, insurance (Aetna), and retail creates a powerful ecosystem. This allows for cross-selling opportunities and data synergy across its diverse business segments.
↑Pharmacy Network Scale
The vast network of CVS pharmacies provides significant scale and convenience for customers. This extensive reach creates high switching costs for consumers seeking their prescriptions.
↑Aetna's Market Position
Acquiring Aetna solidified CVS's position in the health insurance market. This provides a substantial customer base and deep insights into healthcare utilization and costs.
INVESTMENT RISKS
↓Litigation and Fiduciary Duty Concerns
Recent reports suggest potential insider fiduciary duty breaches. Such allegations, if substantiated, could lead to significant legal liabilities and reputational damage.
↓Healthcare Cost Inflation
Rising healthcare costs can pressure margins for both insurers and PBMs. This could impact profitability if CVS cannot effectively manage or pass on these increased expenses.
↓Evolving Healthcare Landscape
The healthcare industry is constantly changing with new technologies and care models. CVS must adapt to these shifts to maintain its competitive edge and relevance.
Base case
CVS base case PE valuation
A base case PE valuation for CVS estimates a fair value of about $83.24 per share, against a current price of $87.95. The model assumes 4.1% annual earnings growth, a 22.9x target PE multiple, and a 10% discount rate.
Intrinsic Value
$83.24
Margin of safety
-5.7%
Expected annual return
-1.1%
Base case assumptions: 4.1% annual earnings growth, 22.9x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-07.
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 Corp. respond.
Open PE Calculator for CVSCompany Overview
CVS Health Corp. is a health solutions company, which engages in the provision of healthcare services. It operates through the following segments: Health Care Benefits, Health Services, Pharmacy and Consumer Wellness, and Corporate and Other. The Health Care Benefits segment operates as a health care benefits provider. The Health Services segment offers a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home. The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations. The Corporate and Other Segment is involved in management and administrative expenses. The company was founded by Stanley P. Goldstein and Ralph Hoagland in 1963 and is headquartered in Woonsocket, RI.
Financial Metrics — CVS PE Stock Valuation Data
PE Ratio (TTM)
23.0x
PEG Ratio
3.59
Earnings Yield
4.37%
ROE (TTM)
6.4%
Revenue/Share (TTM)
$325.30
Dividend Yield
3.02%
Debt/Equity
0.96x
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 Corp.'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 23.0x combined with a PEG ratio of 3.59 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. 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 Corp. using PE: (1) Compare the current PE (23.0x) against the Medical - Healthcare Plans median to assess relative pricing, (2) check the PEG ratio (3.59) 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 3.59, calculated by dividing the PE ratio (23.0x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. 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 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.