Industry Overview - The healthcare industry in the U.S. is experiencing rapid growth, currently accounting for over 17% of the economy and expected to expand at an average rate of 5.8% annually through 2033, potentially exceeding 20% of the economy [1][2] - The sector is considered recession-resistant, historically performing well during economic downturns as healthcare remains a necessity [2] - Demographic trends indicate a growing elderly population, with projections showing the number of Americans aged 65 or older rising from 62 million in 2024 to 84 million in 2054, increasing the demand for healthcare services [3] Company Profile: CVS Health - CVS Health operates approximately 9,600 stores across all 50 states, with 85% of Americans living within 10 miles of a location, making it a significant player in the healthcare sector [5][6] - The company provides a range of healthcare services, including lab tests, health screenings, vaccinations, and minor injury treatments, employing over 40,000 healthcare professionals [6] - CVS Health owns Aetna, the fifth-largest health insurer in the U.S., covering 36 million people, and holds a 27% market share in pharmacy prescriptions nationwide [6][7] Financial Performance - CVS Health reported strong second-quarter results, exceeding Wall Street's earnings and revenue estimates, and raised its full-year earnings per share guidance from $6.00-$6.20 to $6.30-$6.40 [9] - The stock price increased by 18% in August following the earnings report, with analysts projecting earnings growth of 15% in 2025 and 13% in 2026 [9] - Despite a year-to-date stock increase of 65% as of September 10, the stock remains undervalued, trading at just 10 times forward earnings estimates, lower than many peers in the healthcare industry [10][11] Strategic Moves - CVS Health is expanding its footprint by acquiring former Rite Aid locations, which filed for bankruptcy protection, and is also acquiring Rite Aid's prescription files [10] - The company has a market capitalization of approximately $90 billion and has returned value to shareholders through stock repurchases and dividends, paying $3.3 billion in dividends last year [11] Market Position - Recent stock price dips occurred when CVS executives did not provide guidance on upcoming government ratings affecting Medicare Advantage plans, but this is not seen as a significant concern [12] - The current market conditions present an opportunity for investors to acquire shares of CVS Health, given its growth potential and strategic expansions [13]