CVS Health Corp (NYSE:CVS), Walgreens Boots Alliance (NASDAQ:WBA), and Walmart (NYSE:WMT) have reached a middle ground with numerous state and local governments. The companies have reportedly agreed to shell out about $13.8 billion combined, to settle lawsuits against them. The lawsuits were filed against the chains for downplaying the trafficking risks related to the sale of their opioid painkillers.
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The settlement update was reported by Reuters, citing sources familiar with the matter. The proposal includes compensation of $5 billion to be paid by CVS over 10 years, $5.7 billion by Walgreens over 15 years, and $3.1 billion by Walmart mostly upfront.
The proposal comes on the heels of a $26 billion settlement made by Johnson & Johnson (NYSE:JNJ) along with three other U.S. drug distributors over their roles in the opioid crisis in 2021. For context, CDC data revealed that opioid overdose deaths spiked from approximately 70,029 in 2020 to 80,816 in 2021.
Is CVS a Buy or Sell?
Despite the lawsuits, bulls are running on Wall Street for CVS stock. Analyst consensus has a Strong Buy on the stock based on 11 Buys and two Holds. The average forward-12-month price target stands at $122 currently, almost 29% higher than current price levels.
Is WBA Stock a Buy?
On the other hand, Wall Street is cautious about Walgreens stock, with a Hold consensus rating based on seven Holds and one Sell. The consensus expects the stock price to reach $37.57 over the next 12 months, indicating a 3.61% jump from current price levels.
Is Walmart a Good Investment in 2022?
Walmart’s forward-12-month enterprise value-to-sales multiple of 0.76X is at a 57% discount to the sector median, making it a potentially attractive stock to buy in 2022.
Moreover, Walmart stock is a Wall Street favorite currently, with a Strong Buy consensus rating based on 22 Buys and four Holds. Analyst consensus expects the price to appreciate 8.41% over the next year to reach $153.60.
