CVS Health Corp

CVS: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$57.00	Txcrccs	Gkvgpckj

CVS Turns in Good Q4 and Plans to Acquire Oak Street, Delaying Double-Digit Earnings Growth Again

Julie Utterback

Feb 8, 2023

Narrow-moat CVS Health turned in a solid end to 2022, but the big news was that it finally pulled the trigger on a large primary care acquisition by agreeing to pay $10.6 billion ($39 per share) for Oak Street Health. We are still digging into the transaction, but at first glance, we do not anticipate changing our fair value estimate materially. Negatively, CVS management is asking investors to wait again for double-digit earnings growth because of this transaction and growing headwinds in the Medicare Advantage market. Overall, though, CVS shares remain moderately undervalued, in our view.

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