The Pharmacy Stock That's Cheaper Than It Should Be

Core Viewpoint - CVS Health has experienced a significant stock increase of 76% since January, despite market volatility and economic challenges, suggesting it may still be reasonably valued based on its forward earnings multiple of 10.7 compared to the healthcare industry's average of 17.3 [1] Financial Performance - CVS Health's revenue for the second quarter rose by 8.4% year over year to $98.9 billion, with adjusted earnings per share at $1.81, slightly down from $1.83 in the previous year, indicating a better-than-expected performance that exceeded Wall Street's forecasts [5] - The Medicare Advantage (MA) unit has faced challenges with operating margins previously reported between negative 4.5% to negative 5%, but recent results have shown improvement [3][5] Future Outlook - CVS is implementing a strategy to address its MA-related issues by scaling back operations and focusing on improving margins rather than volume, which positions the company favorably for long-term growth [8] - The company's extensive presence in the U.S. healthcare market and established relationships with key industry players contribute to its attractive prospects [8]