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CVS Stock: Deep Dips, Long Waits
30 Aug
Summary
- CVS stock is down 15% from its 52-week high.
- Some stock drops occurred when the market was calm.
- Company faces headwinds in membership and 340B program.
CVS Health stock is trading approximately 15% below its 52-week high, a notable dip despite a 34% increase over the last twelve months. Historically, the company has weathered market shocks, with its deepest fall during the 2008-2009 Global Financial Crisis being less severe than the S&P 500's. However, recovery periods have varied significantly.
Several significant stock declines for CVS Health occurred during periods of market stability. For instance, during the 2023 SVB Regional Banking Crisis, while the index fell 6.7%, CVS Health dropped 25%, taking about 28 months to recover. Similarly, in 2016-2017, the stock fell 18% during a calm market period and required approximately 54 months for recovery, far exceeding the median recovery time of about 10 months.
Despite these challenges, CVS Health continues to demonstrate revenue growth, with trailing twelve-month revenue reaching about $415 billion, a 7.4% increase. Management recently raised full-year 2026 adjusted EPS guidance to a range of $7.90 to $8.10. Looking ahead to 2027, anticipated headwinds include membership declines at Caremark and pressure in the 340B program, though an Aetna recovery is expected to provide a boost. A 2027 adjusted EPS outlook of at least $8.44 is considered reasonable.
