CVS Health Trades Cheaper Than Industry: How to Play the Stock?

Core Insights - CVS Health is currently attractively valued with a Value Score of B and a forward five-year price-to-sales (P/S) ratio of 0.23, which is below its median of 0.29 and the Zacks industry average of 0.41 [1] - The stock has surged 64.2% year-to-date, outperforming industry peers such as UnitedHealth Group and The Cigna Group [3][4] Financial Performance - The Zacks Consensus Estimate for CVS Health's 2025 earnings per share (EPS) is $6.34, reflecting a nearly 17% increase over 2024, with estimates having moved up 3.9% in the past 90 days [17] - The 2026 EPS estimate stands at $7.14, indicating a growth of 12.6% [17] Business Segments - CVS Health's diversified model continues to drive performance, with improvements in the Medicare business and a focus on optimizing Aetna's product offerings [7][10] - The Pharmacy & Consumer Wellness (PCW) segment is benefiting from strong execution and technological investments, maintaining a high retail script share [12][13] Innovations and Digital Strategy - Aetna has introduced new digital tools to enhance member experience, including Aetna Care Paths, which simplifies healthcare navigation [11] - CVS Health is investing $20 billion over the next decade to improve tech-enabled consumer health experiences, addressing interoperability challenges in the U.S. healthcare system [15][16] Market Position - CVS Health's stock performance and attractive valuation relative to industry peers support its diversified model and long-term growth prospects [18][19]