• There seems to be no bearish argument justifying the current stock price - neither the competition nor the trouble brick-and-mortar stores are facing.
• The debt levels are definitely high, but CVS is generating enough cash and has enough liquid assets on its balance sheet to handle it.
• CVS seems to be extremely undervalued, and the stock price should be at least in the triple digits (even in very conservative calculations).

I am covering CVS Health Corporation (NYSE:CVS) since November 2017, when I wrote about the company for the first time. Back then, it was trading around $70, and I already called the stock undervalued. Over the last three years, I have written several bullish articles about CVS, and in April 2019, I finally bought CVS when it was trading a little above $50.

Data by YCharts

Although the stock climbed to $75 after I bought the stock, it crashed in March 2020 along with everything else, and it completely missed the rally that was going on in the market over the last few months. I understand that CVS is not a “hot stock” and not a technology company, but I am puzzled why the market does not recognize the value of CVS. And although I remain very bullish, the divergence between my opinion about the stock’s intrinsic value and the market’s opinion what a fair price for CVS should be (currently $60) makes me wonder if I miss anything.

In this article, I will therefore “test” and “challenge” my bullish thesis. As the stock is not really moving higher although I and many other authors on Seeking Alpha are very bullish, we have to question the bullish thesis. Among lawyers, it is a typical exercise to take both sides of the argument and try to find arguments for both sides. In this article, I will try to do the same and try to take the bearish side. I will try to find arguments why CVS is a terrible investment and deserves the low valuation multiples at which it is trading right now. But, of course, I will also try to disprove the bearish arguments.

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