CVS Health Corporation (CVS) DCF Valuation
Transparent DCF models put CVS Health Corporation (CVS)'s fair value in a range of $67.00 – $365.95 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $97.06 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $97.06, the market is pricing in roughly +8.0%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -10.6%. The price is betting on acceleration above its track record.
Current Price
$97.06
Fair-Value Range
$67.00 – $365.95
Market-Implied Growth
+8.0%/yr
vs -10.6% 5Y actual
CVS DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $9.5B · 1.28B shares · net debt $70.2B
Estimated Fair Value
$67.00
-31.0% vs $97.06
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $97.06; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $96.61 | $104 | $114 | $125 | $138 |
| 9.0% | $75.23 | $80.54 | $86.67 | $93.83 | $102 |
| 10.0% | $58.94 | $62.71 | $67.00 | $71.89 | $77.54 |
| 11.0% | $46.13 | $48.90 | $52.00 | $55.48 | $59.43 |
| 12.0% | $35.81 | $37.89 | $40.19 | $42.75 | $45.60 |
About CVS Health Corporation
CVS Health Corporation is a prominent healthcare services provider operating across the United States. The company's Health Care Benefits division delivers a range of health insurance offerings, including traditional plans, voluntary coverage, and consumer-directed options, alongside associated services. Its diverse clientele spans employer organizations, private individuals, university students, part-time and hourly staff, various health plans, healthcare providers, government bodies, state-sponsored programs, labor unions, and individuals living abroad. Through its Pharmacy Services segment, CVS Health manages pharmacy benefits, offering comprehensive solutions such as designing and administering plans, managing drug formularies, overseeing retail pharmacy networks, and providing mail-order, specialty pharmacy, and infusion services. This segment also delivers clinical support and helps manage disease and medical expenditures. It serves a broad array of clients, including employers, insurance carriers, trade unions, government employee groups, health plans, prescription drug programs, Medicaid managed care organizations, and plans available on both public and private health insurance marketplaces, in addition to other health benefit plan sponsors and individual consumers. Operationally, this segment encompasses specialty retail pharmacies, specialty mail-order services, general mail-order dispensing pharmacies, compounding pharmacies, and facilities dedicated to infusion and enteral nutrition support. The Retail/LTC (Long-Term Care) segment is responsible for selling both prescription and over-the-counter medications, consumer health and beauty items, and personal care products. It also delivers healthcare services via its MinuteClinic walk-in medical clinics. Furthermore, this segment handles the distribution of prescription drugs and offers pharmacy consulting along with other supplementary services to long-term care facilities and various other care environments. As of December 31, 2021, CVS Health boasted approximately 9,900 retail outlets and 1,200 MinuteClinic locations. This network is complemented by online retail pharmacy platforms, LTC pharmacies, and on-site pharmacies. Originally established in 1963 and headquartered in Woonsocket, Rhode Island, the company was known as CVS Caremark Corporation before officially rebranding to CVS Health Corporation in September 2014.
- Sector
- Healthcare
- Industry
- Medical - Healthcare Plans
- CEO
- J. David Joyner