The ratings on CVS Caremark Corp. reflect Standard&Poor's Ratings Services' expectations that solid operating performance at the retail segment will largely offset weakness at the pharmacy benefit management (PBM) segment, and the company will maintain a moderate financial policy that is commensurate with the rating. We view CVS' business risk profile as strong, supported by its solid position in the favorably regarded drugstore industry, leading position as a PBM company, diverse cash flow stream, and generally good operating performance. However, the company participates in the highly competitive retail pharmacy industry, the PBM segment has underperformed its peers, and it is subject to the uncertain effect of ongoing civil and governmental investigations into the practices of PBMs. CVS Caremark
