Huge News for CVS Stock Investors

We got some massive news for CVS stock investors as according to Bloomberg, the company is discussing plans to spin off its retail pharmacy business. Now, this could be huge given CVS Health is one of the largest companies in the world when measured by trailing 12-mon revenue or when measured by the number of locations outstanding. So, I wanted to discuss the details of this announcement, what the market reaction is, and what I rank CVS, what's my fair value estimate for this particular business. >> I want to thank the Mly Full for sponsoring this video. Visit full.com/parkkev for the 10 best stocks to buy now. So, as you probably already know, brickandmortar sales have been declining for the better part of the previous decade as consumers have shifted to more online purchasing activity, frequenting stores less often. And so, that makes an establishment with nearly 9,000 retailies a difficult to manage operation, especially as wages to man those retail locations continue rising. state-by-state minimum wage laws are passing, increasing the amount you have to pay, and given the dynamics, fewer customer visits, higher cost of operations, the situation doesn't look good. And so, understandably, the company is looking for ways to divest away. They've already closed hundreds of locations. And I wouldn't be surprised even if this divevestigure doesn't take place if they continue this trend of closing more locations as they try to optimize the service they provide their customers. So CVS stock was up as much as 3.7% in after hours trading following the Financial Times report. A CVS representative didn't immediately respond to a request for comment. Now company this size with this kind of divevestature is not an easy thing to manage and so the details would probably be slow to come out and management would probably like to do this at their own pace and discuss this probably during their next quarterly investor update. But if the rumors keep swirling around and the management team keeps seeing the price reaction of these developments, they might be forced to come out and provide more details to investors. CVS stock was already up 15% year-to- date in 2026 plus dividends. It's been one of the better performing stocks, especially when you measure on a risk adjusted basis. This is not one of the riskier stocks. In fact, it's one of the less risky stocks being a healthcare company. It's not as strongly correlated to the performance of the macroeconomy as some other more cyclical businesses would be. And given the consumer headwinds, this is not surprising to see. And of course, I've been pleased with its performance. I've had this stock ranked as a buying opportunity all year with my most recent update on August 13th, 2026, ranking it again, reiterating the buy ranking with the low confidence, low conviction level on that buy recommendation. Interestingly, the analysts on Wall Street that are following CVS are forecasting roughly 12% earnings per share growth over the next multiple years for CVS. That would be a positive result for investors as doubledigit earnings per share growth for a business in this mature category with store closures rather than new openings is a very successful result if indeed the company does deliver these kinds of results over the next few years. One of the bigger concerns about CBS is its large debt balance. It now boasts over $74 billion in total long-term debt. It's one of the most indebted companies in the United States. So, it's trading at a forward price to earnings of 10.72, which if you recall, this figure, the forward PE, is lower than the earnings per share estimate for long-term earnings per share growth from the analysts on Wall Street that are following CBS. Typically, I see that as a positive, a very attractive situation when a company is forecast to grow their earnings per share at a rate that's larger than the company's forward PE ratio. That's a very attractive valuation. It's another way to look at the PEG ratio, the price to earnings versus growth. So, I also took this as an opportunity to update my discounted cash flow valuation for CVS. I revised estimates higher given the company's better performance here in 2026, not just in terms of stock price, but also business performance. I estimate the fair value to be worth over $120. And as of today's market close, not including the after hours action, it was selling at $9141, leaving an upside of over 30% in its current market price compared to my fair value estimate. So to answer the question I posed in the headline, I do think this stock is a buying opportunity. This news is a positive development and so it makes me even more bullish on the company's longerterm prospects. I will reiterate that buy ranking today, November 3rd, 2026 for CVS stock. Hey everyone. So many of you have been asking about my investing strategy, and I'm excited to announce that I've written a book that's available for sale now that describes my six-step invest in investing framework for evaluating stocks. I've added the link in the description below.