CVS Caremark - Comparative Multiple Analysis

CVS Caremark (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of CVS Caremark

WikiWealth compares CVS Caremark's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with CVS Caremark's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for CVS Caremark.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to CVS Caremark's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for CVS Caremark's Analysis

How does this work? The Comparative Investment Analysis determines the value of CVS Caremark by comparing CVS Caremark financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of CVS Caremark.

See the CVS Caremark cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in CVS Caremark.

Also, see the CVS Caremark's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and CVS Caremark's valuation conclusion for a quick summary.