CVS Health Is Soaring 75% This Year. And the Stock Still Looks Cheap.

Core Viewpoint - CVS Health has shown significant recovery and growth in stock performance, rising 75% this year after a challenging 2024 where it fell over 43% [1][2] Company Performance - The company replaced its CEO last year, leading to improved performance and investor sentiment [3][7] - CVS's adjusted earnings per share for Q3 were $1.60, surpassing analyst expectations of $1.37, with revenue reaching $102.9 billion, an 8% increase compared to expectations of $98.9 billion [6] Valuation and Investment Appeal - Despite the stock's significant rise, CVS remains attractively valued, trading at a price-to-earnings (P/E) multiple of 22, which drops to less than 11 on a forward earnings basis [9] - The stock's trailing P/E appears high due to a $5.7 billion goodwill impairment charge, but the forward P/E provides a clearer picture of its valuation [9] - CVS's dividend yield stands at 3.4%, significantly higher than the S&P 500 average of 1.1%, making it an appealing option for income-focused investors [12]