Why CVS Is ‘Insanely Cheap,’ ON Semi a Laggard Catching Up, and Grail Too Expensive to Chase
Jim Cramer sees three stocks with very different amounts of bad news or good news already baked into their prices, and figuring out which side each sits on changes everything about whether to buy.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
On October 6, 2026, Jim Cramer called CVS Health (NYSE:CVS | CVS Price Prediction) extremely cheap, made the catch-up case for ON Semiconductor (NASDAQ:ON), and warned viewers away from Grail (NASDAQ:GRAL). The thread connecting all three is how much news each stock already reflects.
CVS Health Has a Value Floor in Cramer’s View
Cramer said: “The number one drugstore in the country has now become insanely cheap. Down here at $86 and change, I think CVS Health has finally become too cheap to ignore.” He added, “I do not think Caremark problems, even as they could be difficult, should be enough to turn you off to CVS at 11 times earnings.”
Caremark is CVS’s pharmacy benefit manager. Its profit depends on the gap between what it pays for drugs and what it collects. On the second-quarter call, management said 340B pressure from manufacturers restricting covered entities should become a drag next year, with client retention running “slightly lower than our historical performance.”
Cramer thinks the stock overshot: “The stock has plunged from 110 to 86. A possible 5% hit to next year’s earnings should not send a stock down 22%, knocking nearly $30 billion off the company’s market cap, especially not when CVS remains very strong.” He also noted: “We’re talking about a proposed change to the 340B Medicaid reimbursement rules, not the change, a proposed change. President Trump already tried something similar in 2018, and the Supreme Court unanimously struck it down.”
“The actual quarter was great, even if Caremark had some hair on it. Aetna’s on fire and the drugstore business is strong,” Cramer said. The second-quarter filing backs this: adjusted EPS of $2.58 beat the $1.85 consensus, and full-year adjusted EPS guidance rose to $7.90 to $8.10. CVS traded at $86.68 in the October 7 premarket.
ON Semiconductor’s Catch-Up Has Already Started
Cramer said: “Now that the Synaptics deal is no longer an overhang, Wall Street can finally get back to valuing On Semi for its rapidly growing infrastructure business. If you want to buy a laggard semi that can play catch up, you can do a lot worse than buying some On Semi.”
Cramer said ON Semi originally agreed to pay $7 billion in stock for Synaptics, valued at $2.5 billion in March. Terms were renegotiated to $5.7 billion in cash. “On Semi’s data center business had accelerated, more than doubling year over year, growing 30% just from the previous quarter,” Cramer said. Management expects AI data center revenue to more than double in 2026.
ON Semi traded at $84.00 in the October 7 premarket, after rising 13.1% over the prior week and 52.2% this year. Much of the catch-up has already happened.
Grail Is the Speculative One
Grail sells Galleri, a blood test designed to detect many cancers at once before symptoms appear. It is not yet FDA approved, with potential approval expected in the first part of 2027. Because Grail lost $110.2 million last quarter, investors compare market value with revenue instead of earnings.
Cramer said: “Grail is a $6.1 billion company that currently trades at 34 times sales, not earnings. We’ve been rejecting stocks that sell at 34 times earnings. This is sales. That means it is very expensive.” Grail’s market cap stood near $5.7 billion on October 7. Cramer granted the bull case: “Grail screening revenue rose 24% in the most recent quarter, test volume up 35%,” plus “$861 million in cash and equivalents and very little debt.” Still, “because it’s up so high, it’s become speculative.” Shares have risen 73.6% over the past month.
What Each Stock Already Reflects
Cramer is grading expectations. CVS carries bad news in its price; the market priced in too much. Grail carries good news; the market priced in too much, with FDA risk ahead. ON Semi sat between them until the Synaptics uncertainty cleared. CVS offers the widest gap between price and fundamentals, backed by raised guidance and a proposed rule still only proposed.
Contact [email protected] for any questions or corrections.
Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
