Key Takeaways
- Prem Shah, who will become CEO of CVS Pharmacy after CVS Health’s planned split, bought $2 million of CVS Health stock on Nov. 6.
- He bought two days after the stock fell 12% on the company’s plan to separate its drugstores from Aetna and Caremark.
- Analysts have raised their 2026 and 2027 earnings estimates over the past 90 days, and the stock trades near its five-year average forward P/E.
- The numbers back the buy. The risks to watch are the cost of the split and a 2027 low point for Caremark’s segment.
CVS Health (CVS) just got a $2 million vote of confidence from the executive picked to run its drugstores after the company splits in two.
Prem Shah, CVS Health’s executive vice president and group president, bought 23,855 shares on Friday, Nov. 6, at an average price of $83.89, a Form 4 filed the same day shows. That’s $2,001,315 in all, two days after the stock sank 12% on the breakup plan. Shares are still up 11% over the past year, but they sit 21% below July’s 52-week high of $110.68.
A strong quarter, a surprise split
The slide started before the breakup news. On its Aug. 5 call, CVS raised its 2026 forecast but warned that its 340B business would be a headwind in 2027 and that Caremark would lose members.
Then on Nov. 4, CVS beat and raised again. Adjusted EPS came in at $2.09, up from $1.60 a year earlier, 2026 guidance went up to at least $8.20, and CVS put 2027 at at least $8.65. But it also plans to split into two public companies in the first half of 2028. CVS Health will keep Aetna and Caremark, and CVS Pharmacy will take the roughly 9,000 stores. UBS analyst Kevin Caliendo told Reuters the split “came as a surprise, and is perceived as happening as a defensive move against regulation.” Five firms, including UBS, cut their price targets within two days, though all kept buy-equivalent ratings.
TIKR tracks 27 analysts on CVS Health. How many say “Buy”?
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Shah is betting on both halves
The purchase raised Shah’s stake by 37%, to 88,516 shares, so it’s a real add for him. He ran Pharmacy & Consumer Wellness before his current role. On the Nov. 4 call, CEO David Joyner credited him with “leading the recovery effort from a business that was guiding negative 5 two years ago.” That segment’s adjusted operating income rose 10.6% to $1.6 billion in the third quarter. And since CVS Health shareholders will own shares of both companies after the split, his $2 million rides on Aetna and Caremark as well as the stores he’ll run.
Does $83.89 add up?
Wall Street expects CVS’s earnings to keep growing through 2028:
The 2026 consensus has risen to $8.24 from $7.92 90 days ago, and 2027’s to $8.63 from $8.49. That’s just under management’s “at least $8.65.” CVS also says the split’s costs are already in its guidance, so I don’t see the breakup knocking estimates lower.
Shah didn’t pay up for that growth, either. CVS traded at 9.9x forward earnings on Nov. 6, right around its five-year average of 10x and well below the 15x it hit in July:
Analysts’ average price target has also climbed over the past year. At $110, it’s down from $116 in September but up from $92 a year ago:
The numbers back the buy
The split is the main risk. At Wolfe Research’s healthcare conference on Monday, Joyner said its ongoing costs should come in nearer $500 million than the estimates above $1 billion. Separately, CFO Brian Newman expects 2027 to “reflect trough earnings” for Health Services, Caremark’s segment.
Still, Shah paid about the stock’s usual multiple for earnings that analysts are raising. At Monday’s $85.25, the average target is 29% above the price. I think the numbers back his buy.
Tracking the stocks insiders are buying is a good way to find ideas, but one executive’s purchase is just one data point. We’ll learn more early next year, when CVS gives formal 2027 guidance with its fourth-quarter results.
So what is CVS Health stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
