CVS Just Turned Its 9,000 Pharmacies Into a GLP-1 Delivery Machine. 1 Top Wall Street Analyst Thinks That's a Reason to Buy the Stock

The market for weight-loss drugs, led by GLP-1 medicines like Wegovy, is on a rapid northbound trajectory. One good way to capitalize on it is to invest in pharmaceutical companies that currently lead this niche or have the potential to establish a strong foothold. However, it isn't just drugmakers that may profit from the rapid rise of the GLP-1 category. Other companies across the healthcare delivery funnel could also see increased sales and profits thanks to this trend, and CVS Health (CVS 0.26%), a leading pharmacy chain, is one of them. The company recently announced a GLP-1 program that had Wall Street buzzing, as some analysts think the move makes the stock more attractive. Should investors consider buying CVS Health's shares right now?

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Making GLP-1 medicines more accessible

Weight-loss drugs haven't been easy for patients to obtain. One of the main reasons for that is cost. GLP-1 medicines are expensive. Even with recent price drops, they can cost several hundred dollars per month -- a meaningful hit to many patients' budgets. And since insurance coverage for these therapies for weight loss has been spotty at best, many are left having to forego them, even when they need them. Further, some physicians have been somewhat hesitant to prescribe GLP-1s to patients due to coverage issues and other factors. And even when patients start taking these medicines, a meaningful number experience uncomfortable side effects that make their weight loss journeys challenging.

Enter CVS Health. The company recently announced a program to help patients through all this, available at its more than 9,000 pharmacies across the U.S. CVS Health will offer virtual visits priced at $49 with clinicians who can evaluate patients and prescribe GLP-1 medicines. The drugs will cost as little as $25 per month for patients with insurance coverage, $50 per month for eligible Medicare patients, or will start at $149 monthly for those without insurance. The pharmacy giant will also provide one-on-one professional support and access to over-the-counter products to help people manage side effects.

This initiative could attract many patients to the company's platform and help boost revenue in its retail pharmacy division. Allen Lutz, an analyst at Bank of America (BAC 0.53%), recently raised his price target on the stock to $110 from $100 following these developments. The company's shares are currently trading at about $104 each, so the new price target implies a modest upside from current levels.

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NYSE: CVS

CVS Health

Today's Change

(-0.26%) $-0.27

Current Price

$104.39

Key Data Points

Market Cap

$134B

Day's Range

$103.55 - $106.13

52wk Range

$58.50 - $106.13

Volume

334.9K

Avg Vol

8.3M

Gross Margin

13.88%

Dividend Yield

2.54%

Is CVS Health stock a buy?

CVS Health has performed well over the past 18 months, after several years of challenges. The company's financial results have improved as it has made significant headway in containing costs within its Medicare Advantage division, where rising expenses were eroding its profits and margins. In the first quarter, CVS Health's revenue grew by a healthy 6% year over year to $100.4 billion, while its adjusted earnings per share rose 14% to $2.57. CVS Health also increased its guidance for the full fiscal year 2026.

The healthcare giant's ability to successfully weather the storm it faced in recent years and bounce back speaks volumes about its resilience as a business. And on top of that, CVS Health also has outstanding long-term prospects. The company's well-known brand name, extensive network of retail locations, and diversified healthcare business spanning pharmacy services, insurance, primary care, and more enable it to remain with patients throughout much of their care journey.

That's exactly what it is doing with its new GLP-1 program: offering consultations, medicines, and insurance coverage for eligible patients, as well as one-on-one follow-up with professionals and over-the-counter medications to help manage side effects. The diversified nature of CVS Health's business grants the company a strong competitive advantage and may help it capitalize on the healthcare sector's expansion over the next few decades, especially as the world's population ages.

Lastly, CVS Health is also a solid dividend stock, with a forward yield currently of 2.5%, compared to the S&P 500's average of 1.1%. The company has increased its payouts by 56.5% over the past decade. All these are good reasons why it's worth it for long-term income seekers to purchase CVS Health's shares.