But should it win applause from investors?
If the company's estimate of $2 billion in tobacco sales per year is accurate, the company is sacrificing 1.6% of its total annual take of $123 billion to this decision.
That could mean a significant hit to its annual top-line growth, which averages about 10% per year.
For the first three quarters, the company had sales of nearly $94 billion, and it reports fourth-quarter sales on Feb. 11. Analysts are expecting CVS to report fourth-quarter revenue of about $32.7 billion and earnings of $1.11 per share.
CVS seems willing to sacrifice annual top-line growth in the future in hopes of a "halo effect" it can use against rival Walgreens (WAG), which so far says it is "continuing to evaluate" its tobacco policy.
Walgreens has in the past sold its own private label pipe tobacco, and even protested against a San Francisco decision to ban tobacco sales in pharmacies, saying that would keep it from counseling people against smoking.
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