CVS Health (CVS) Stock Jumps 5% as Turnaround Starts to Look Real

TLDR

• CVS posted adjusted EPS of $2.57, beating the $2.18 analyst estimate, marking its fifth consecutive quarterly beat
• Revenue hit $100.4 billion, well above the $95 billion Wall Street forecast
• Medical benefit ratio improved to 84.6%, down from 87.3% a year ago
• Full-year 2026 adjusted EPS guidance raised to $7.30–$7.50, up from $7.00–$7.20
• CVS stock climbed 4.9% in premarket trading following the results

CVS Health stock jumped 4.9% in premarket trading Wednesday after the company posted a strong first quarter and raised its full-year guidance.

CVS Health Corporation, CVS

Adjusted earnings came in at $2.57 per share, beating the analyst consensus of $2.18. Revenue of $100.4 billion also cleared the $95 billion Wall Street had expected.

This marks CVS’s fifth straight quarterly beat. The company has taken a cautious approach to guidance as it works through a broader turnaround after a rough 2024.

CVS raised its full-year 2026 adjusted EPS outlook to a range of $7.30 to $7.50, up from $7.00 to $7.20. The company also lifted its cash flow from operations target to at least $9.5 billion, from at least $9 billion.

The stock had gained just 1.7% year-to-date heading into Wednesday, trailing the S&P 500’s 6% rise.

Medical Costs Improve at Aetna

The standout number was the medical benefit ratio at its Aetna insurance unit. It came in at 84.6%, well below the 87.58% analysts had expected and down from 87.3% a year ago.

That ratio measures how much of premium revenue is spent on actual medical care. A lower number means the insurer is keeping more. CFO Brian Newman said the improvement came from better forecasting and cost controls.

Both UnitedHealth and Humana also beat estimates on this metric in Q1, signaling a broader improvement across Medicare Advantage insurers.

The U.S. government said in April it would raise 2027 payments to Medicare Advantage insurers by 2.48% on average. Newman said that still falls short of projected cost increases for next year, and CVS may need to adjust pricing or benefits.

PBM Revenue Climbs, Pharmacy Profits Slip

CVS’s health services segment, which houses its Caremark pharmacy benefit manager, posted an 11% revenue increase to $48.2 billion. Operating income hit $1.34 billion, in line with forecasts.

A more profitable drug mix helped boost Caremark’s results, according to Newman. Analyst Michael Cherny of Leerink had flagged that hitting $1.3 billion in adjusted operating income for the segment would be a key step in restoring investor confidence in the unit.

PBMs have faced ongoing pressure from lawmakers and regulators over drug pricing practices. CVS has a pending FTC settlement over allegations its PBM inflated insulin prices, which the company has denied.

CVS is also pushing back against a Tennessee bill that would bar PBMs from owning pharmacies in the state. That bill has passed the legislature and is awaiting action from the governor.

The retail pharmacy segment posted a 5% revenue gain in 2025 after absorbing pharmacies from Rite Aid, adding 9 million customers. But operating income for the unit fell 8.8% year-over-year in Q1.

CVS cited regulatory changes affecting certain drug prices, lower cold and flu activity, and weather disruptions — including store closures due to snow — as factors weighing on the pharmacy business.

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