CVS Health Corp.

The stable outlook on CVS incorporates our expectation that consolidated performance trends at both the CVS and Aetna businesses remain positive. We expect the company will repay on average about $4.5 billion to $5 billion of debt annually with cash flows while investing in business initiatives including strengthening its in-store capabilities. As a result, we forecast leverage will decline to about 3.8x by the end of 2020 and will be on track for further reduction in 2021. We could lower the ratings if there are delays in reducing leverage with prospects for further deleveraging in future years. This could occur if cash flow generation is less than we forecast, which would limit debt repayment, and the company does not take

...Modest near-term operating pressures from COVID-19, but CVS Health Corp.'s cost reduction initiatives and longer-term business prospects are favorable. We believe CVS will benefit from its business diversity as growth in pharmacy services and modest cost improvement in the health care segment offset performance softness in front-end sales. We continue to believe the company's business prospects are solid, supported by the aging U.S. population, greater use of prescription drugs in patient therapy, and the company's patient-centric store model....

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