CVS Health (CVS) is ditching retail sales to focus on pharmacy operations at 12 new locations opening in 2025. These new CVS stores will offer an incredibly limited amount of retail products to consumers while still running a full pharmacy. To achieve this, the company is focused on opening stores roughly half the size of its typical locations.
CVS Health is choosing not to add many retail products to these locations due to falling sales in that sector. However, some products relevant to its pharmacy operations, such as over-the-counter drugs, will still be available at the mini stores.
CVS Health’s decision to focus on its pharmacy operations makes sense as they account for 80% of its sales. Considering the high value of real estate space, it makes sense to maintain a strong pharmacy presence while limiting retail operations. Especially as CVS is going through a period of struggle that has it shuttering many of its stores.
What This Means for CVS Stock
CVS Health focusing more on pharmacy than retail sales could be a boon to the company’s stock. Current economic conditions have hampered pharmacy chains with rival Walgreens Boots Alliance (WBA) recently announcing a deal to go private after years of struggles.
Today’s stock movement has CVS shares up 0.56%. That builds on its 50.46% increase year-to-date and helps erase its 8.16% decrease over the last year. Walgreens going private has been a strong catalyst for CVS stock this year as it will remove one of its rivals from public trading.
Is CVS Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for CVS Health is Strong Buy based on 17 Buy and three Hold ratings over the last three months. With that comes an average price target of $71.83, a high of $81, and a low of $51. This represents a potential 7.71% upside for CVS stock.
See more CVS stock analyst ratings
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