Section 1: Company Overview and Fundamentals

1.1 Company Overview:

CVS Health Corporation (NYSE:CVS), together with its subsidiaries is a leading diversified health solutions company.     The Company has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with over 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

The company's sales and gross profit have climbed at an exceptional 5-Year CAGR of 11.78% and 34.48%, respectively, indicating rising demand for the firm's goods and services. Additionally, a greater CAGR for gross profit than revenues indicates that the company has been more effective at limiting its cost of revenues and other direct expenses over past five years.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~32.41% of the total shareholding, signifying diversed shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~9.13% and ~4.85%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY22:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

  Stock Performance:

• CVS has been corrected by 15.86% in the past three months, and with a 19.04% of correction in the past six months.

• The stock is leaning towards its lower band of its 52-week range of USD 107.60 and 52-week low price of USD 72.11. Post the announcement of FY22 results the stock has corrected by 16.85%, with currently price near a support zone of USD 68-USD 72.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA, with the current RSI of around 40.19.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 19, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.