Healthcare
Following its acquisition of Aetna, CVS is in the midst of a transition from pharmacy business to a massively profitable medical data and technology company - this reflects what UnitedHealth accomplished with Optum, and gives CVS opportunities to monetise its existing pharmacy business in new ways which could accelerate profitability and growth. Uniform Accounting confirms that the transition is underway and that the market isn’t pricing this in. Considering management’s strong execution and alignment to continue executing, equity upside continues to be warranted.
Edition: 132
- 01 April, 2022
Walgreens Boots Alliance (WBA)
Consumer Staples
WBA’s strategy is stale and increasingly disintermediated. It requires a complete pivot to maintain relevancy, but new CEO Roz Brewer’s lack of strategic vision and relevant experience positions her poorly to implement such a change. She will continue the strategy set by domineering Chairman Stefano Pessina and multiple overly tenured executives/directors averse to change. WBA's stock has rallied 15% since the announcement of Brewer’s appointment and trades above CVS Health on both a PE and EV/EBITDA basis, despite slower growth, similar leverage and worse competitive positioning.
Edition: 113
- 25 June, 2021