Stock Analysis on Net

CVS Health Corp. (NYSE:CVS)

This company has been moved to the archive! The financial data has not been updated since May 1, 2025.

Price to FCFE (P/FCFE) 

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Free Cash Flow to Equity (FCFE)

CVS Health Corp., FCFE calculation

US$ in millions

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12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income attributable to CVS Health 4,614 8,344 4,149 7,910 7,179
Net (income) loss attributable to noncontrolling interests (28) 24 16 (12) 13
Net noncash charges 4,412 5,043 5,009 6,419 5,514
Change in operating assets and liabilities, net of effects from acquisitions 109 15 7,003 3,948 3,159
Net cash provided by operating activities 9,107 13,426 16,177 18,265 15,865
Purchases of property and equipment (2,781) (3,031) (2,727) (2,520) (2,437)
Commercial paper borrowings (repayments), net 1,919 200
Proceeds from issuance of short-term loan 5,000
Repayment of short-term loan (5,000)
Proceeds from issuance of long-term debt 7,913 10,898 987 9,958
Repayments of long-term debt (4,773) (3,166) (4,211) (10,254) (15,631)
Free cash flow to equity (FCFE) 11,385 18,327 9,239 6,478 7,755

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Net Cash Provided by Operating Activities
The net cash provided by operating activities exhibited fluctuations over the five-year period. Starting at 15,865 million USD in 2020, it increased to a peak of 18,265 million USD in 2021. This was followed by a decline to 16,177 million USD in 2022 and a further decrease to 13,426 million USD in 2023. The downward trend continued into 2024, reaching 9,107 million USD. Overall, the data indicates a weakening in operating cash flow generation after 2021.
Free Cash Flow to Equity (FCFE)
The free cash flow to equity showed a different pattern compared to operating cash flow. It started at 7,755 million USD in 2020 and then declined to 6,478 million USD in 2021. However, it rebounded significantly in 2022, increasing to 9,239 million USD. In 2023, FCFE surged dramatically to 18,327 million USD, more than doubling the previous year's value. This was followed by a decrease in 2024 to 11,385 million USD, though the level remained substantially higher than the values before 2023. This pattern suggests variability in capital expenditures or financing activities affecting the company's equity cash flow.
Overall Insight
While operating cash flow showed a peak in 2021 followed by a steady decline, free cash flow to equity exhibited more volatility with a notable spike in 2023. This divergence might indicate changes in investment activities or capital structure decisions impacting available cash flows to equity holders. The substantial increase in FCFE in 2023, despite a decrease in operating cash flow, could imply lower capital expenditures or significant inflows from financing sources that year. The subsequent decline in both measures in 2024 suggests a potential normalization or adjustment after the fluctuations.

Price to FCFE Ratio, Current

CVS Health Corp., current P/FCFE calculation, comparison to benchmarks

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No. shares of common stock outstanding 1,265,019,429
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions) 11,385
FCFE per share 9.00
Current share price (P) 69.45
Valuation Ratio
P/FCFE 7.72
Benchmarks
P/FCFE, Competitors1
Abbott Laboratories 39.44
Elevance Health Inc. 6.48
Intuitive Surgical Inc. 132.05
Medtronic PLC 16.27
UnitedHealth Group Inc. 7.79
P/FCFE, Sector
Health Care Equipment & Services 14.55
P/FCFE, Industry
Health Care 17.56

Based on: 10-K (reporting date: 2024-12-31).

1 Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.


Price to FCFE Ratio, Historical

CVS Health Corp., historical P/FCFE calculation, comparison to benchmarks

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Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
No. shares of common stock outstanding1 1,260,795,063 1,258,449,553 1,284,111,667 1,312,510,426 1,311,354,926
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)2 11,385 18,327 9,239 6,478 7,755
FCFE per share3 9.03 14.56 7.19 4.94 5.91
Share price1, 4 63.22 76.05 88.96 104.79 70.53
Valuation Ratio
P/FCFE5 7.00 5.22 12.36 21.23 11.93
Benchmarks
P/FCFE, Competitors6
Abbott Laboratories 40.25 76.56 26.11 24.52 38.42
Elevance Health Inc. 8.26 16.04 14.26 11.07 7.75
Intuitive Surgical Inc. 156.44 177.77 89.67 58.39 81.15
Medtronic PLC 16.39 29.20 19.71 38.91 23.06
UnitedHealth Group Inc. 12.12 15.33 12.57 20.11 13.93
P/FCFE, Sector
Health Care Equipment & Services 17.78 22.95 16.47 22.14 18.61
P/FCFE, Industry
Health Care 19.35 18.18 18.40 17.94 17.51

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 11,385,000,000 ÷ 1,260,795,063 = 9.03

4 Closing price as at the filing date of CVS Health Corp. Annual Report.

5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= 63.22 ÷ 9.03 = 7.00

6 Click competitor name to see calculations.


Share Price Trend
The share price exhibited an initial upward trend from 70.53 USD at the end of 2020 to a peak of 104.79 USD at the end of 2021. Subsequently, it decreased consistently over the next three years, falling to 88.96 USD in 2022, 76.05 USD in 2023, and further down to 63.22 USD in 2024. This indicates a significant correction or decline in market valuation following the peak in 2021.
Free Cash Flow to Equity (FCFE) per Share
FCFE per share showed some volatility but an overall increasing trend over the five-year period. It declined from 5.91 USD in 2020 to 4.94 USD in 2021, followed by a notable increase to 7.19 USD in 2022. The FCFE per share peaked at 14.56 USD in 2023 before declining to 9.03 USD in 2024. This pattern suggests that the company increased its ability to generate free cash flow for equity holders particularly after 2021, despite the later drop in 2024.
Price to FCFE (P/FCFE) Ratio
The P/FCFE ratio demonstrates significant fluctuation corresponding inversely to changes in share price and FCFE per share. It rose sharply from 11.93 in 2020 to 21.23 in 2021, reflecting a higher market price relative to FCFE, likely due to the rising share price and lower FCFE that year. The ratio then declined to 12.36 in 2022 and further to a low of 5.22 in 2023, indicating the market price became more attractive relative to the cash flows. In 2024, the ratio increased again to 7.00, corresponding with a decrease in FCFE per share and share price.
Overall Financial Insights
The data shows that after an initial surge in market valuation by the end of 2021, the company's stock price corrected downward consistently into 2024. Meanwhile, free cash flow generation per share increased significantly particularly in 2023, implying improved operational cash generation capability. The P/FCFE ratio indicates the stock was relatively overvalued at the end of 2021 but became undervalued in terms of cash flow by 2023 before slightly correcting higher in 2024. Such fluctuations may reflect changes in market sentiment, operational performance, or external factors impacting valuation.