The Last Drugstore Standing: Why Jim Cramer’s Bullish on CVS Health in 2025

As Jim Cramer, the outspoken host of Mad Money, has repeatedly emphasized in 2025, CVS Health (NYSE: CVS) is no longer just a pharmacy—it’s now the undisputed king of an industry in turmoil. With rivals collapsing and investors fleeing sectors tied to discretionary spending, Cramer sees CVS as the “last man standing” in a retail pharmacy landscape reshaped by consolidation, recession fears, and strategic brilliance.

The Turnaround: From Lagging to Leading

CVS’s 2025 resurgence began with a stark contrast to its 2024 struggles. After missing earnings estimates for three consecutive quarters due to soaring costs in its Aetna health insurance division, the company delivered a 41% year-to-date return by mid-2025, outpacing competitors like Walgreens Boots Alliance (WBA) and Rite Aid (RID). The February 2025 earnings beat and reaffirmed full-year forecast marked a pivotal shift, signaling to investors that CVS had stabilized Aetna and was positioned to capitalize on industry-wide chaos.

Why Rivals Are Falling—and CVS Isn’t

Cramer’s bullish stance hinges on CVS’s “sole survivor status” in a collapsing market:
- Walgreens’ privatization: Acquired by a private equity firm in March 2025, Walgreens is now set to close hundreds of stores. Cramer argues this will directly benefit CVS, which has already seen increased foot traffic and prescription transfers.
- Rite Aid’s bankruptcy: With Rite Aid’s stores shuttering, CVS now faces minimal competition in key urban markets.
- Biosimilar dominance: CVS’s aggressive push to convert patients from expensive drugs like Humira to its biosimilar, Cordavis, has slashed costs by 80% and generated $1 billion in savings for clients.

The Recession-Proof Play

Cramer labels CVS a “textbook recession-proof stock” for two reasons:
1. Essential services: Its pharmacy, health insurance, and walk-in clinics are non-discretionary. Even in a slowdown, consumers will prioritize medications and check-ups.
2. Competitive vacuum: As rivals shrink, CVS gains pricing power. Analysts estimate its margins could expand by 100–200 basis points in 2025 alone, with a long-term target of 4–5% over three years.

Challenges Ahead—and Why They’re Manageable

• Legal risks: The DOJ’s opioid lawsuit looms, with potential costs in the billions. Cramer, however, dismisses this as a “long-term distraction,” noting that investors are focused on near-term earnings.
• Aetna’s headwinds: Medicare Advantage Star Ratings remain below target, but improvements could add a $700 million tailwind by 2026.

The Bottom Line: A Buy for Defensive Investors

CVS’s 2025 performance underscores its transformation into a resilient, sector-leading enterprise. With a forward P/E of 10.35x—a discount to the S&P 500’s 18.56x—and 74 hedge funds holding its stock, the data supports Cramer’s thesis:

• Stock performance: Up 41% YTD in 2025 vs. Walgreens’ 14.6% gain.
• Margin recovery: Projections of 100–200 basis points improvement in 2025.
• Market share: Dominates a sector where rivals are either bankrupt or shrinking.

Conclusion: The Drugstore of the Future

Jim Cramer’s bullish call on CVS isn’t just about today’s performance—it’s about positioning for tomorrow. As the sole survivor in a collapsing industry, CVS is uniquely positioned to capitalize on reduced competition, rising healthcare demand, and its own operational turnaround. With a stock price still 7.1% below its average analyst target of $73, and a valuation that reflects its defensive profile, CVS is a rare gem in 2025: a company that thrives because of the chaos around it.

For investors seeking stability in a volatile market, CVS isn’t just the last drugstore standing—it’s the one building an empire on the ashes of its rivals.