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CVS Health Corporation (CVS or 'the company'), formerly known as CVS Caremark Corporation, together with its subsidiaries, is the largest integrated pharmacy health care provider in the US. The company also operates its retail pharmacy business in Brazil. CVS is headquartered in Woonsocket, Rhode Island. 



In our option CVS economic moat comes from its two-prong strategy. CVS is the largest U.S. pharmacy retailers and also as a top-tier pharmacy benefit manager. CVS is unique because it has integrated its operations vertically; it processes claims as an independent pharmacy benefit manager and also runs one of the largest retail pharmacy chains.



Investors were clearly pleased with the manner in which CVS Health Corp. closed out 2014. Revenues from the Pharmacy Services business were especially impressive, surging nearly 22%. The strength was largely attributable to the earlier acquisition of home-infusion company Coram, as well as initiatives to make filling prescriptions easier. Our initial 2016 estimates look for the momentum to continue. This stock offers appeal for risk-averse investors with a long-term horizon. CVS holds good 3- to 5-year total return potential when you factor in the income component.



  • Merger of CVS and Caremark Rx created leading integrated pharmacy health care providers in the US

  • Extensive network of retail pharmacy stores and pharmacy services in the US

  • ExtraCare loyalty program driving front-store sales growth

  • Strong financial performance and significant free cash flow driving shareholder value 


  • Allegations against CVS's refill practices triggered monitoring and investigations 


  • Intense competition in retail pharmacy and PBM industries

  • Price war in PBM industry could affect the company's gross margins 


  • JV with Cardinal Health likely to create a large generic sourcing entity in the US

  • Acquisition of Coram likely to expand CVS’s offerings in specialty services area

  • New walk-in medical clinics likely to further enhance CVS's integrated service offerings

  • Aging US population to boost demand for the company's services 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  


The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.


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