CVS Health Stock: Future Superior To Recent Past

The recent price drop at CVS Health (CVS) has caught my attention. As earnings at the pharmacy chain have continued to grow, the stock price has fallen from $113 to $81 in the past years as investors have needed to readjust their sanity in valuing the stock.

Last year, it was trading at $113 per share compared to trailing earnings of $4.51. This was a silly high valuation of 25x earnings for a healthcare retailer. About $5 billion in profits should have in no way justified a valuation of $124 billion. The business was incredibly strong, and was delivering impressive growth, but the stock had reached a point that was nearly double what it was worth.

Since then, earnings have continued their march forward, with CVS expected to earn $5.75 per share by the end of 2016. The stock has fallen 28% in the past year, and the stock price Read the rest of this article!