Is CVS and Walgreens stocked for cheap to ignore?

Summary of valuation

CVS Health (CVS) is down 19.4% on a YTD basis as of April 3. Higher reimbursement pressures, deflation in generic and low branding inflation are expected to damage the result. The weak earnings outlook takes a fee on the share price.

Meanwhile, rival Walgreens Boots Alliance (WBA) sits a similar reason for the underperformance and lowers the full-year result. Weak quarterly results and a reduction in guidance deepened investors' feelings on the WBA share. Walgreens is down 19.7% so far this year.

WAKE UP WITH BAGELS & STOX, our new email address that suppresses and informs you before the day begins. Sign up here! [19659003] Due to the recent downturn, CVS Health Stock is trading at a significant discount, starting from April 3, the CVS share trading with a 7.8x forward PE multiple, which is about 47% lower than the five-year historic Meanwhile, Walgreens shares a forward PE of 9.0x, which is about 44% lower than the five-year historic majority.

Outlook

We expect long-term challenges to set the direction Analysts expect the bottom line of both these companies to decline in the short term, reflecting higher remuneration pressure.

Whether it's near future heads, both CVS Health and Walgreens look attractive on the valuation front. S Health's bottom line is expected to stabilize in fiscal policy 2020 and increase by 7.0%. CVS Health Stock also offers a dividend of 3.8%.

By comparison, Walgreens bottom line is also expected to remain low in the short term. However, the management expects repayment pressures to disappear in the coming quarters, which in turn is likely to support earnings growth. Walgreens current dividend yield is 3.2%.