As of July 16, 2025, CVS Health Corp has a Discounted Cash Flow (DCF) derived fair value of $123.28 per share. With the current market price at $63.80, this represents a potential upside of 93.2%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $103.18 |
| DCF Fair Value (10-year) | $123.28 |
| Potential Upside (5-year) | 61.7% |
| Potential Upside (10-year) | 93.2% |
| Discount Rate (WACC) | 5.3% - 8.1% |
Revenue is projected to grow from $372809 million in 12-2024 to $674475 million by 12-2034, representing a compound annual growth rate of approximately 6.1%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 372809 | 4% |
| 12-2025 | 398739 | 7% |
| 12-2026 | 436148 | 9% |
| 12-2027 | 466877 | 7% |
| 12-2028 | 510449 | 9% |
| 12-2029 | 540553 | 6% |
| 12-2030 | 563038 | 4% |
| 12-2031 | 591857 | 5% |
| 12-2032 | 626893 | 6% |
| 12-2033 | 652994 | 4% |
| 12-2034 | 674475 | 3% |
Net profit margin is expected to improve from 1% in 12-2024 to 1% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 4586 | 1% |
| 12-2025 | 4905 | 1% |
| 12-2026 | 5365 | 1% |
| 12-2027 | 5743 | 1% |
| 12-2028 | 6279 | 1% |
| 12-2029 | 6649 | 1% |
| 12-2030 | 6926 | 1% |
| 12-2031 | 7281 | 1% |
| 12-2032 | 7712 | 1% |
| 12-2033 | 8033 | 1% |
| 12-2034 | 8297 | 1% |
with a 5-year average of $2699 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 2883 |
| 12-2026 | 3113 |
| 12-2027 | 3354 |
| 12-2028 | 3607 |
| 12-2029 | 3961 |
| 12-2030 | 4237 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 11 |
| Days Inventory | 23 |
| Days Payables | 61 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 9467 | 1253 | 2517 | 2064 | 3633 |
| 2026 | 13766 | 1827 | 3671 | (3,387) | 11655 |
| 2027 | 14757 | 1956 | 3930 | (2,982) | 11854 |
| 2028 | 16075 | 2139 | 4296 | (1,693) | 11333 |
| 2029 | 17164 | 2265 | 4550 | (2,348) | 12698 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 103.18 | 61.7% |
| 10-Year DCF (Growth) | 123.28 | 93.2% |
| 5-Year DCF (EBITDA) | 82.99 | 30.1% |
| 10-Year DCF (EBITDA) | 111.90 | 75.4% |
Is CVS Health Corp (CVS) a buy or a sell? CVS Health Corp is definitely a buy. Based on our DCF analysis, CVS Health Corp (CVS) appears to be significantly undervalued with upside potential of 93.2%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $63.80.