Market Multiples Homework Use a P/E based market multiples approach to estimate what the market price per share should be as of 12/31/2015. Limit the data used to what is provided below. Express Scripts was exclusively a mail order pharmacy. The other three companies all have physical store locations with some mail order support, which was mostly contracted out to a mail order supplier. Reminder: net income is the same as earnings. Company Names ----> All $ in millions except per share data CVS Health Corporation Rite Aid Corp. Revenues Gross Margin Net Income EBITDA Total Assets Total Liabilities Market Cap (total market price of all shares) $153,290 17.31% $5,237 $10,954 $93,657 $56,461 $112,562 Walgreens Express Boots Scripts Alliance Holding Inc Co $103,444 $101,752 26.03% 8.26% $4,220 $2,476 $6,901 $4,968 $68,782 $53,243 $37,921 $35,871 $89,558 $45,888 $26,528 28.56% $2,109 $1,123 $8,863 $8,806 $8,518 Number of shares outstanding as of 12/31/2015 (millions) Market price per share as of 12/31/2015 (rounded) 1,110 1,090 $82 665 $69 1,065 $8 Return on Sales Asset Turnover Financial Leverage Return on Equity 4.1% 2.0 2.2 18.2% 2.4% 8.0% 1.9 3.4 3.1 155.3 14.2% 4199.3% Required (each question has equal weight): 1. Identify the benchmark company or companies for CVS you will use to value CVS. (briefly explain your choice). 2. Use a P/E based market multiples approach to value CVS in terms of market price per share (show your calculations). 3. Briefly (no more than one or two paragraphs) your valuation and its accuracy. 1. Choose a multiple other than P/E and estimate CVS's market value per share. Then discuss the reasons for the difference between this value and the value from your answer to question 2 above