Introducing Valuation Models! 
Key Takeaways:
- CVS Health stock could reasonably reach $94/share by the end of 2027, based on valuation assumptions from analysts’ consensus estimates.
- This implies a total return of 47% from today’s price of $64/share, with an annualized return of 17% over the next 2.5 years.
- CVS Health operates as America’s leading integrated healthcare company with over 9,000 retail locations, specialty pharmacy services, and health insurance operations.
CVS Health (CVS) is a diversified healthcare services company that operates through three primary segments: Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness.
CVS serves millions of customers through its integrated healthcare platform, combining retail pharmacy, specialty pharmacy, pharmacy benefit management, and health insurance services.
The healthcare giant benefits from its unique position in the healthcare ecosystem, with strong momentum across all business segments and meaningful improvement in its Health Care Benefits division.
With Q1 adjusted earnings per share of $2.25 and a revised full-year guidance, CVS demonstrates the power of its integrated model in addressing rising healthcare costs while improving patient outcomes.
With nearly $95 billion in first-quarter revenue, CVS continues to build toward its aspiration to become America’s most trusted healthcare company through innovation in pharmacy services, improvements in prior authorization, and strategic partnerships.
Here’s why CVS stock could return 17% annually through 2027 and continue to deliver solid performance through 2030.
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What the Model Says for CVS Stock
We analyzed CVS Health’s upside using valuation assumptions based on the company’s diversified healthcare platform and operational improvements across all segments.
Based on estimates of 5% annual revenue growth, 4% operating margins, and stable valuation multiples, the model projects CVS stock could rise from $64/share to $94/share.
That represents a total return of 47% and an annualized return of 17% over the next 2.5 years.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for CVS stock:
1. Revenue Growth: 5%
CVS delivered strong Q1 results with nearly $95 billion in revenue, up 7% year-over-year, driven by growth across all segments.
CVS increased its full-year 2025 adjusted EPS guidance to $6.00-$6.20, up from the previous range of $5.75-$6.00.
We used a 5% forecast reflecting analysts’ consensus estimates of steady growth from the integrated healthcare model, continued pharmacy market share gains, and stabilizing trends in the Medicare Advantage business.
2. Operating Margins: 4%
CVS demonstrates improved operational efficiency with a first-quarter adjusted operating income of $4.6 billion.
Analysts expect gradual margin expansion as the company benefits from operational improvements in the Aetna business and continued strength in pharmacy operations.
3. Exit P/E Multiple: 10x
CVS stock trades at reasonable multiples for a diversified healthcare company with multiple growth drivers. We used current valuation levels given the company’s integrated business model and progress toward becoming America’s most trusted healthcare company.
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What Happens If Things Go Better or Worse?
TIKR’s valuation tool allows investors to test a wide range of outcomes based on how CVS stock performs through 2030 under different scenarios (these are estimates, not guaranteed returns):
- Low Case: Healthcare cost pressure and competitive challenges → 10% annual returns
- Mid Case: Steady execution of integrated strategy and margin recovery → 15% annual returns
- High Case: Accelerated innovation and market share gains → 19% annual returns
The upside scenario could deliver exceptional performance if the company successfully executes its transformation strategy.
If CVS cannot fix its struggling retail pharmacy segment, continues losing ground to more efficient competitors, or fails to stabilize margins and debt levels, the business could deteriorate faster than expected. In an extreme case, long-term solvency could become a concern.
Investors should balance the upside scenarios with the real possibility that this story ends much worse.
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TIKR Takeaway
CVS Health represents a compelling combination of essential healthcare services and innovative solutions that address the fragmented healthcare system through its unique, integrated model.
CVS stands out as a diversified healthcare play benefiting from its 9,000 community health destinations, leading pharmacy operations, and improving health insurance business performance.
CVS stock is best suited for investors seeking exposure to the healthcare sector, companies with multiple revenue streams and defensive characteristics, and businesses positioned to benefit from an aging population and rising healthcare utilization.
The combination of market-leading pharmacy operations, strategic partnerships like the Novo Nordisk Wegovy agreement, and ongoing improvements in the Aetna business makes CVS an attractive consideration for healthcare-focused portfolios positioned for long-term growth.
Is CVS stock worth buying today? Use TIKR’s Valuation Model and analyst forecasts to see if it looks undervalued.
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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 stocks mentioned. Thank you for reading, and happy investing!
