CVS Health (CVS)
Market Price (5/8/2026): $87.4 | Market Cap: $111.3 BilSector: Health Care | Industry: Health Care Services
CVS Health (CVS)
Market Price (5/8/2026): $87.4Market Cap: $111.3 BilSector: Health CareIndustry: Health Care Services
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.7%, Dividend Yield is 3.1%, FCF Yield is 6.6% Stock buyback supportStock Buyback 3Y Total is 3.0 Bil Attractive cash flow generationCFO LTM is 10 Bil, FCF LTM is 7.4 Bil Low stock price volatilityVol 12M is 31% Megatrend and thematic driversMegatrends include Digital Health & Telemedicine, and Aging Population & Chronic Disease. Themes include Telehealth Platforms, Remote Patient Monitoring, Show more. | Trading close to highsDist 52W High is 0.0%, Dist 3Y High is 0.0% Weak multi-year price returns3Y Excs Rtn is -43% | Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 60% Expensive valuation multiplesP/EPrice/Earnings or Price/(Net Income) is 38x Key risksCVS key risks include [1] elevated Medicare costs pressuring its Health Care Benefits segment, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.7%, Dividend Yield is 3.1%, FCF Yield is 6.6% |
| Stock buyback supportStock Buyback 3Y Total is 3.0 Bil |
| Attractive cash flow generationCFO LTM is 10 Bil, FCF LTM is 7.4 Bil |
| Low stock price volatilityVol 12M is 31% |
| Megatrend and thematic driversMegatrends include Digital Health & Telemedicine, and Aging Population & Chronic Disease. Themes include Telehealth Platforms, Remote Patient Monitoring, Show more. |
| Trading close to highsDist 52W High is 0.0%, Dist 3Y High is 0.0% |
| Weak multi-year price returns3Y Excs Rtn is -43% |
| Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 60% |
| Expensive valuation multiplesP/EPrice/Earnings or Price/(Net Income) is 38x |
| Key risksCVS key risks include [1] elevated Medicare costs pressuring its Health Care Benefits segment, Show more. |
Qualitative Assessment
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1. Strong First Quarter 2026 Earnings Beat and Raised Full-Year Guidance.
CVS Health significantly surpassed analyst expectations in its first-quarter 2026 earnings report on May 6, 2026. The company reported adjusted earnings per share (EPS) of $2.57, which was $0.36, or 16.29%, higher than the consensus estimate of $2.21. Total revenues for the quarter reached $100.4 billion, exceeding analyst estimates of $94.97 billion and marking a 6.2% increase year-over-year. Building on this strong performance, CVS Health raised its full-year 2026 adjusted EPS guidance to a range of $7.30 to $7.50, up from the prior range of $7.00 to $7.20. The company also increased its full-year revenue guidance to at least $405 billion from at least $400 billion.
2. Improved Performance and Medical Cost Controls in the Health Care Benefits Segment.
The Health Care Benefits segment, primarily driven by Aetna, demonstrated "substantial improvement" in the first quarter of 2026. A key indicator of this turnaround was the medical benefit ratio (MBR), which improved to 84.6% in Q1 2026 from 87.3% in the prior year, signaling better control over medical costs and outperforming analysts' estimates of 87.58%. This improvement in adjusted operating income within the Health Care Benefits segment was a primary contributor to the overall positive results.
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Stock Movement Drivers
Fundamental Drivers
The 18.3% change in CVS stock from 1/31/2026 to 5/7/2026 was primarily driven by a 504.0% change in the company's Net Income Margin (%).| (LTM values as of) | 1312026 | 5072026 | Change |
|---|---|---|---|
| Stock Price ($) | 73.87 | 87.36 | 18.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 394,084 | 407,905 | 3.5% |
| Net Income Margin (%) | 0.1% | 0.7% | 504.0% |
| P/E Multiple | 199.9 | 37.9 | -81.0% |
| Shares Outstanding (Mil) | 1,269 | 1,273 | -0.3% |
| Cumulative Contribution | 18.3% |
Market Drivers
1/31/2026 to 5/7/2026| Return | Correlation | |
|---|---|---|
| CVS | 18.3% | |
| Market (SPY) | 3.6% | 8.1% |
| Sector (XLV) | -6.1% | 23.4% |
Fundamental Drivers
The 13.7% change in CVS stock from 10/31/2025 to 5/7/2026 was primarily driven by a 504.0% change in the company's Net Income Margin (%).| (LTM values as of) | 10312025 | 5072026 | Change |
|---|---|---|---|
| Stock Price ($) | 76.84 | 87.36 | 13.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 394,084 | 407,905 | 3.5% |
| Net Income Margin (%) | 0.1% | 0.7% | 504.0% |
| P/E Multiple | 207.9 | 37.9 | -81.8% |
| Shares Outstanding (Mil) | 1,269 | 1,273 | -0.3% |
| Cumulative Contribution | 13.7% |
Market Drivers
10/31/2025 to 5/7/2026| Return | Correlation | |
|---|---|---|
| CVS | 13.7% | |
| Market (SPY) | 5.5% | 6.9% |
| Sector (XLV) | 1.2% | 27.5% |
Fundamental Drivers
The 35.7% change in CVS stock from 4/30/2025 to 5/7/2026 was primarily driven by a 115.5% change in the company's P/E Multiple.| (LTM values as of) | 4302025 | 5072026 | Change |
|---|---|---|---|
| Stock Price ($) | 64.36 | 87.36 | 35.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 372,809 | 407,905 | 9.4% |
| Net Income Margin (%) | 1.2% | 0.7% | -41.9% |
| P/E Multiple | 17.6 | 37.9 | 115.5% |
| Shares Outstanding (Mil) | 1,262 | 1,273 | -0.9% |
| Cumulative Contribution | 35.7% |
Market Drivers
4/30/2025 to 5/7/2026| Return | Correlation | |
|---|---|---|
| CVS | 35.7% | |
| Market (SPY) | 30.4% | 3.5% |
| Sector (XLV) | 4.9% | 26.9% |
Fundamental Drivers
The 33.9% change in CVS stock from 4/30/2023 to 5/7/2026 was primarily driven by a 91.4% change in the company's P/E Multiple.| (LTM values as of) | 4302023 | 5072026 | Change |
|---|---|---|---|
| Stock Price ($) | 65.25 | 87.36 | 33.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 322,467 | 407,905 | 26.5% |
| Net Income Margin (%) | 1.3% | 0.7% | -46.2% |
| P/E Multiple | 19.8 | 37.9 | 91.4% |
| Shares Outstanding (Mil) | 1,309 | 1,273 | 2.8% |
| Cumulative Contribution | 33.9% |
Market Drivers
4/30/2023 to 5/7/2026| Return | Correlation | |
|---|---|---|
| CVS | 33.9% | |
| Market (SPY) | 78.7% | 16.0% |
| Sector (XLV) | 13.9% | 33.5% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| CVS Return | 55% | -8% | -13% | -41% | 84% | 11% | 52% |
| Peers Return | 24% | 15% | -2% | 0% | -2% | 7% | 48% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 8% | 96% |
Monthly Win Rates [3] | |||||||
| CVS Win Rate | 58% | 42% | 33% | 33% | 67% | 60% | |
| Peers Win Rate | 53% | 58% | 45% | 55% | 58% | 40% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 60% | |
Max Drawdowns [4] | |||||||
| CVS Max Drawdown | 0% | -13% | -28% | -42% | -1% | -11% | |
| Peers Max Drawdown | -9% | -12% | -16% | -19% | -22% | -17% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: UNH, CI, ELV, HUM, WMT. See CVS Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 5/7/2026 (YTD)
How Low Can It Go
| Event | CVS | S&P 500 |
|---|---|---|
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -13.9% | -9.5% |
| % Gain to Breakeven | 16.1% | 10.5% |
| Time to Breakeven | 99 days | 24 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -25.2% | -6.7% |
| % Gain to Breakeven | 33.7% | 7.1% |
| Time to Breakeven | 855 days | 31 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -14.3% | -24.5% |
| % Gain to Breakeven | 16.7% | 32.4% |
| Time to Breakeven | 49 days | 427 days |
| 2020 COVID-19 Crash | ||
| % Loss | -27.1% | -33.7% |
| % Gain to Breakeven | 37.2% | 50.9% |
| Time to Breakeven | 239 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -20.7% | -19.2% |
| % Gain to Breakeven | 26.1% | 23.7% |
| Time to Breakeven | 711 days | 105 days |
| 2016-2017 Trump Reflation Bond Selloff | ||
| % Loss | -18.1% | -3.7% |
| % Gain to Breakeven | 22.0% | 3.9% |
| Time to Breakeven | 1638 days | 6 days |
In The Past
CVS Health's stock fell -8.6% during the 2025 US Tariff Shock. Such a loss loss requires a 9.5% gain to breakeven.
Preserve Wealth
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Asset Allocation
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| Event | CVS | S&P 500 |
|---|---|---|
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -25.2% | -6.7% |
| % Gain to Breakeven | 33.7% | 7.1% |
| Time to Breakeven | 855 days | 31 days |
| 2020 COVID-19 Crash | ||
| % Loss | -27.1% | -33.7% |
| % Gain to Breakeven | 37.2% | 50.9% |
| Time to Breakeven | 239 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -20.7% | -19.2% |
| % Gain to Breakeven | 26.1% | 23.7% |
| Time to Breakeven | 711 days | 105 days |
| 2010 Eurozone Sovereign Debt Crisis / Flash Crash | ||
| % Loss | -22.6% | -15.4% |
| % Gain to Breakeven | 29.1% | 18.2% |
| Time to Breakeven | 301 days | 125 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -39.1% | -53.4% |
| % Gain to Breakeven | 64.3% | 114.4% |
| Time to Breakeven | 799 days | 1085 days |
In The Past
CVS Health's stock fell -8.6% during the 2025 US Tariff Shock. Such a loss loss requires a 9.5% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About CVS Health (CVS)
AI Analysis | Feedback
A company combining the retail presence of Walgreens, the health insurance of UnitedHealthcare, and pharmacy benefit management like Express Scripts.
A healthcare giant like UnitedHealth Group, but with a massive retail pharmacy and clinic footprint akin to Walgreens.
It's like Walgreens and UnitedHealthcare merged, then added a major pharmacy benefit management arm.
AI Analysis | Feedback
- Health Insurance Products: CVS Health offers various traditional and consumer-directed health insurance plans and related services.
- Pharmacy Benefit Management (PBM) Solutions: CVS Health provides pharmacy benefit management services, including formulary management, mail order, and specialty pharmacy services, to employers and health plans.
- Retail Pharmacy Sales: CVS Health sells prescription and over-the-counter drugs, as well as general consumer health and beauty products, through its retail stores.
- Specialty Pharmacy and Infusion Services: CVS Health provides specialized pharmacy services for complex medical conditions, including mail-order, compounding, and infusion services.
- MinuteClinic Walk-in Medical Services: CVS Health offers accessible healthcare services for minor illnesses and injuries through its MinuteClinic walk-in clinics.
- Long-Term Care (LTC) Pharmacy Services: CVS Health provides prescription drug distribution and related pharmacy consulting services to long-term care facilities.
AI Analysis | Feedback
CVS Health serves a diverse customer base, primarily reaching individuals through various channels, including direct sales and through intermediary organizations. Based on the provided description, its major customer categories are:
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Individual Consumers: This includes people who directly purchase prescription drugs, over-the-counter medications, consumer health and beauty products at CVS retail locations and online. It also encompasses individuals seeking health care services through MinuteClinic walk-in medical clinics, as well as college students, part-time and hourly workers, and expatriates who may directly enroll in health insurance products.
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Employer Groups and Organizations: This category includes employers, labor groups, unions, government employee groups, and other sponsors of health benefit plans. These entities purchase health insurance products, pharmacy benefit management (PBM) solutions, and related services from CVS Health to provide to their employees, members, or constituents.
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Health Plans, Insurers, and Care Facilities: This category encompasses insurance companies, health plans, governmental units, government-sponsored plans, prescription drug plans, and Medicaid managed care plans. These organizations contract with CVS Health for services such as formulary management, retail pharmacy network management, mail order pharmacy, specialty pharmacy, infusion, and clinical services. Additionally, care facilities and other care settings purchase prescription drugs and related pharmacy consulting services from CVS Health's Retail/LTC segment.
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- Cencora (COR)
- Cardinal Health (CAH)
- McKesson Corporation (MCK)
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David Joyner, Chairman and CEO David Joyner assumed the role of Chairman and CEO of CVS Health in October 2024. He brings over 37 years of experience in healthcare and pharmacy benefit management to the company. Prior to his appointment as CEO, Joyner led CVS Caremark's pharmacy services division, overseeing pharmacy benefits for approximately 90 million members. His career began at Aetna as an employee benefit representative. Joyner has also served on the boards of several private equity-backed healthcare companies and advised the founder and CEO of gWell, a precision health and medicine company. He holds a Bachelor of Business Administration in finance from Texas Tech University. Brian Newman, Executive Vice President and Chief Financial Officer Brian Newman was appointed Executive Vice President and Chief Financial Officer of CVS Health, effective May 12, 2025, having started the role on April 21, 2025. Before joining CVS Health, he served as CFO of United Parcel Service (UPS) from 2019 to May 2024. Newman also spent 26 years at PepsiCo, Inc., holding various global financial leadership roles, including executive vice president for Global Operations and Chief Strategy Officer. He began his career as an investment banker. Newman currently serves on the Board of Colgate-Palmolive and the Board of Regents at Georgetown University. Tilak Mandadi, Executive Vice President, Ventures and Chief Experience and Technology Officer Tilak Mandadi is the Executive Vice President, Ventures and Chief Experience and Technology Officer at CVS Health, where he leads the company's data, digital, and technology strategy, and oversees growth and innovation through digital-led, consumer-facing experiences. His previous roles include Chief Strategy, Innovation & Technology Officer at MGM Resorts International. Prior to MGM, he was the Executive Vice President of Digital, and Chief Technology Officer at Disney Parks, Experiences and Products, where he oversaw a global team serving over 150 million annual guests and consumers. Before his time at Disney, Mandadi led global Digital Transformation at American Express, focusing on cards, consumer travel, and banking. He holds a master's degree in computer science from the University of Oregon. Sree Chaguturu, MD, Executive Vice President and President of Health Care Delivery Dr. Sree Chaguturu serves as Executive Vice President and President of Health Care Delivery at CVS Health. He is responsible for overseeing healthcare delivery operations, and champions clinical innovation, integrated care models, and improved patient outcomes. Dr. Chaguturu leads CVS Health's medical affairs organization, which encompasses various segments including Aetna, CVS Caremark, CVS Pharmacy, MinuteClinic, women's health and genomics, data and analytics, patient safety, and health equity. He previously held the position of Chief Medical Officer for CVS Caremark. Amy Compton-Phillips, MD, Executive Vice President and Chief Medical Officer Dr. Amy Compton-Phillips is the Executive Vice President and Chief Medical Officer of CVS Health, a role she assumed on May 19, 2025. In this capacity, she is responsible for setting clinical strategy and leading medical affairs, driving quality improvement and innovation across CVS Health's services. Before joining CVS Health, Dr. Compton-Phillips was the president and chief physician executive of Press Ganey, a firm focused on healthcare performance improvement. Her extensive background also includes seven years as president of clinical operations at Providence Health and 22 years in various roles at Kaiser Permanente.AI Analysis | Feedback
Key Risks to CVS Health (CVS)
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Regulatory and Reimbursement Pressures: CVS Health operates in a heavily regulated healthcare environment, making it vulnerable to changes in government policies, laws, and regulations, particularly concerning reimbursement rates for its government-sponsored programs like Medicare and Medicaid. Weakness in Medicare Advantage rates, specifically a proposed low increase for 2027, could undermine over one-third of CVS Health's revenue and hinder growth in this critical segment. Pharmacy reimbursement pressures further contribute to this risk.
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Intense Competition and Market Saturation: The company faces significant and increasing competition across all its segments from traditional pharmacy chains, other health insurers, pharmacy benefit managers, online retailers (including tech giants entering healthcare), and new healthcare providers. This competitive landscape necessitates continuous innovation and adaptation to maintain market share and relevance, potentially leading to pricing pressures and reduced profitability.
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Rising Medical Costs and Profit Margin Erosion: CVS Health is exposed to the risk of rising medical costs, particularly within its Health Care Benefits segment. Higher-than-expected medical expenses can significantly impact the company's already thin single-digit profit margins and lead to substantial financial consequences, especially in the absence of robust sales growth. Challenges such as unforeseen heightened utilization in Medicare Advantage further exacerbate these pressures.
AI Analysis | Feedback
- Increased legislative and regulatory scrutiny of Pharmacy Benefit Managers (PBMs) could significantly impact the profitability and operating model of CVS Health's Pharmacy Services segment (CVS Caremark).
- The expansion of online prescription fulfillment services, particularly from major entrants like Amazon Pharmacy, poses a direct competitive threat to CVS Health's retail pharmacy and mail-order businesses by offering alternative, convenient, and potentially lower-cost prescription access.
AI Analysis | Feedback
CVS Health Corporation operates in several large addressable markets within the United States.
Health Care Benefits
The U.S. health and medical insurance market, in which CVS Health's Health Care Benefits segment (Aetna) operates, is substantial. This market was valued at approximately USD 1.65 trillion in 2026 and is projected to grow to USD 2.15 trillion by 2031. Another estimate placed the market at USD 613.0 billion in 2024, expanding to USD 1161.7 billion by 2032. A further report valued the market at USD 469.8 billion in 2025.
Pharmacy Services
CVS Health's Pharmacy Services segment (CVS Caremark) participates in the U.S. pharmacy benefit management (PBM) market. This market was estimated at USD 519.45 billion in 2025 and is projected to reach approximately USD 921.52 billion by 2035. Other reports indicate the PBM market size was calculated at USD 459.65 billion in 2025, with a projection to reach around USD 1,041.11 billion by 2034. Additionally, the U.S. specialty pharmacy market, a key component of pharmacy services, saw an estimated $265 billion in dispensed pharmaceuticals in 2024.
Retail/LTC
In its Retail/LTC segment, CVS Health operates in several U.S. markets:
- Retail Pharmacy: The U.S. retail pharmacy market is estimated to reach US$ 670.6 billion in 2025 and is projected to grow to US$ 901.4 billion by 2032. Another source noted the market size as USD 670.5 billion in 2025. More broadly, the U.S. pharmacy market was valued at USD 643.4 billion in 2024 and is projected to reach USD 905.8 billion by 2033.
- MinuteClinic (Retail Clinics/Walk-in Clinics): The U.S. retail clinics market was valued at USD 2.44 billion in 2024 and is expected to grow from USD 2.71 billion in 2025 to USD 6.29 billion by 2033. Another estimate for the walk-in clinic market size in 2025 is $7.45 billion, with a projection to reach approximately $20 billion by 2033.
- Long-Term Care (LTC) Pharmacy Services: The U.S. long-term care pharmacy services market is estimated to be valued at USD 22.8 billion in 2025 and is expected to reach USD 38.7 billion by 2032.
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Here are 3-5 expected drivers of future revenue growth for CVS Health (CVS) over the next 2-3 years:- Expansion of Health Services and Care Delivery: CVS Health anticipates significant revenue growth from its Health Services segment, particularly through the expansion and integration of acquired assets like Oak Street Health and Signify Health. The company plans to add 50 to 60 new Oak Street Health centers in 2024, and the new CVS Healthspire brand aims to simplify access to multi-payor capabilities, driving better outcomes and increased member value.
- Growth in Medicare Advantage Membership and Margin Recovery: The Medicare Advantage business, operated under its Aetna arm, is integral to CVS Health's strategy. Despite some challenges with elevated medical costs in 2024, CVS Health expects to add at least 800,000 new Medicare Advantage members in 2024 and anticipates Medicare Advantage margin recovery starting in 2025. This recovery is a key driver for strong earnings growth and a favorable long-term outlook.
- New Pharmacy Reimbursement Models: CVS Health is implementing new pharmacy reimbursement models, including CVS CostVantage for its retail pharmacies and CVS Caremark TrueCost for Pharmacy Benefit Manager (PBM) clients. These models, with CostVantage launching for commercial payors in 2025, are designed to create a more transparent, sustainable, and value-aligned approach to pharmacy reimbursement, reflecting the true net cost of prescription drugs.
- Optimization of Pharmacy and Consumer Wellness Segment: The Pharmacy and Consumer Wellness segment is expected to continue contributing to revenue growth through increased prescription volume, a favorable pharmacy drug mix, and the strategic integration of its retail pharmacies as a "front door" to the broader healthcare enterprise. The retail arm demonstrated strong revenue growth in 2023 and Q4 2024.
- Leveraging Technology and Integrated Platform for Enhanced Engagement: CVS Health is developing a fully integrated, AI-native platform, branded as "Engagement as a Service," to connect its various healthcare entities (Aetna, CVS Caremark, CVS Pharmacy, and Health Care Delivery). This initiative aims to transform consumer experiences, enhance engagement, lower healthcare costs, and unlock personalized products and services, ultimately driving greater lifetime member value.
AI Analysis | Feedback
Share Repurchases
- CVS Health repurchased approximately $3.0 billion of common stock during the nine months ended September 30, 2024, and approximately $2.0 billion during the nine months ended September 30, 2023, under its 2021 Repurchase Program.
- As of February 10, 2026, the company completed repurchases of approximately $8.5 billion under the buyback announced on December 9, 2021.
- The Board of Directors authorized a $10.0 billion share repurchase program on November 17, 2022, with the full $10.0 billion remaining as of September 30, 2024.
Share Issuance
- CVS Health's shares outstanding for 2025 were 1.271 billion, a 0.71% increase from 2024.
- In November 2024, a one-time promotional equity award was granted to the CEO, consisting of stock options to acquire one million shares and stock-settled SARs with respect to 492,537 shares, with a grant price of $71.82 per share.
Outbound Investments
- CVS Health acquired Oak Street Health for $10.6 billion in February 2023.
- CVS Health acquired Signify Health for $8 billion in September 2022.
- In April 2024, CVS Health acquired Hella Health, a platform offering Medicare health insurance plans.
Capital Expenditures
- CVS Health's capital expenditures for fiscal years ending December 2021 to 2025 averaged $2.778 billion, with a peak of $3.031 billion in December 2023.
- The company plans a substantial $20 billion investment over the next decade, beginning in June 2025, to enhance technology and interoperability in healthcare delivery.
- A multi-year plan to close approximately 900 stores aims to refocus assets into HealthHUBs that offer expanded clinical services.
Latest Trefis Analyses
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| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 04302026 | GEHC | GE HealthCare Technologies | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 04302026 | IQV | IQVIA | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 04302026 | UHS | Universal Health Services | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 04302026 | ABT | Abbott Laboratories | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 04302026 | ZBIO | Zenas BioPharma | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 02282025 | CVS | CVS Health | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 13.7% | 26.2% | -8.7% |
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 265.58 |
| Mkt Cap | 96.6 |
| Rev LTM | 342,872 |
| Op Inc LTM | 18,835 |
| FCF LTM | 7,527 |
| FCF 3Y Avg | 7,551 |
| CFO LTM | 9,572 |
| CFO 3Y Avg | 9,644 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 9.4% |
| Rev Chg 3Y Avg | 8.9% |
| Rev Chg Q | 5.3% |
| QoQ Delta Rev Chg LTM | 1.3% |
| Op Inc Chg LTM | 1.6% |
| Op Inc Chg 3Y Avg | -9.2% |
| Op Mgn LTM | 4.2% |
| Op Mgn 3Y Avg | 4.2% |
| QoQ Delta Op Mgn LTM | 0.1% |
| CFO/Rev LTM | 3.5% |
| CFO/Rev 3Y Avg | 3.4% |
| FCF/Rev LTM | 2.4% |
| FCF/Rev 3Y Avg | 2.1% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 96.6 |
| P/S | 0.3 |
| P/Op Inc | 17.8 |
| P/EBIT | 15.5 |
| P/E | 27.1 |
| P/CFO | 12.6 |
| Total Yield | 5.8% |
| Dividend Yield | 2.0% |
| FCF Yield 3Y Avg | 5.2% |
| D/E | 0.4 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 16.1% |
| 3M Rtn | 14.2% |
| 6M Rtn | 14.8% |
| 12M Rtn | -1.8% |
| 3Y Rtn | -1.2% |
| 1M Excs Rtn | 6.3% |
| 3M Excs Rtn | 6.3% |
| 6M Excs Rtn | 5.2% |
| 12M Excs Rtn | -32.8% |
| 3Y Excs Rtn | -76.2% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Health Services | 173,605 | 186,843 | 169,576 | 143,194 | 132,663 |
| Health Care Benefits | 130,665 | 105,646 | 91,350 | 82,101 | 75,409 |
| Pharmacy & Consumer Wellness | 124,500 | 116,763 | 108,596 | 66,095 | 60,208 |
| Corporate/Other | 451 | 451 | 530 | 721 | 426 |
| Intersegment Eliminations | -56,412 | -51,927 | -47,585 | ||
| Total | 372,809 | 357,776 | 322,467 | 292,111 | 268,706 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Health Services | 7,243 | 7,312 | 6,781 | 6,667 | 5,454 |
| Pharmacy & Consumer Wellness | 5,774 | 5,963 | 6,531 | 5,322 | 5,640 |
| Health Care Benefits | 307 | 5,577 | 6,338 | 3,521 | 5,166 |
| Net realized capital losses | 117 | -497 | -320 | ||
| Office real estate optimization charges | -30 | -46 | -117 | ||
| Opioid litigation charge | -100 | ||||
| Acquisition-related integration costs | -243 | -487 | 0 | ||
| Restructuring charges | -1,179 | -507 | 0 | ||
| Corporate/Other | -1,348 | -1,318 | -1,613 | -1,606 | -1,641 |
| Amortization of intangible assets | -2,025 | -1,905 | -1,785 | ||
| Loss on Accountable Care assets | -349 | -2,533 | |||
| Acquisition purchase price adjustment outside of measurement period | 0 | ||||
| Gain on divestiture of subsidiary | 475 | ||||
| Goodwill impairment | 0 | ||||
| Intersegment Eliminations | 0 | -711 | -708 | ||
| Omnicare litigation charge | -5,803 | ||||
| Store impairments | 0 | ||||
| Total | 8,516 | 13,743 | 7,954 | 13,193 | 13,911 |
Price Behavior
| Market Price | $87.36 | |
| Market Cap ($ Bil) | 110.9 | |
| First Trading Date | 12/17/1984 | |
| Distance from 52W High | 0.0% | |
| 50 Days | 200 Days | |
| DMA Price | $76.65 | $74.85 |
| DMA Trend | up | indeterminate |
| Distance from DMA | 14.0% | 16.7% |
| 3M | 1YR | |
| Volatility | 33.7% | 31.5% |
| Downside Capture | -0.31 | -0.17 |
| Upside Capture | 17.98 | 12.79 |
| Correlation (SPY) | 7.0% | 3.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.53 | 0.31 | 0.16 | 0.24 | 0.08 | 0.35 |
| Up Beta | -0.29 | -0.27 | 0.11 | 0.08 | -0.04 | 0.50 |
| Down Beta | -2.76 | 0.71 | 0.49 | 0.40 | 0.35 | 0.35 |
| Up Capture | 51% | 37% | 21% | 17% | 12% | 7% |
| Bmk +ve Days | 15 | 22 | 31 | 66 | 141 | 428 |
| Stock +ve Days | 14 | 21 | 34 | 69 | 145 | 407 |
| Down Capture | -369% | 61% | -6% | 29% | -16% | 45% |
| Bmk -ve Days | 4 | 18 | 30 | 56 | 108 | 321 |
| Stock -ve Days | 8 | 22 | 30 | 56 | 107 | 344 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with CVS | |
|---|---|---|---|---|
| CVS | 36.9% | 31.4% | 1.02 | - |
| Sector ETF (XLV) | 9.7% | 15.4% | 0.40 | 30.5% |
| Equity (SPY) | 29.6% | 12.5% | 1.86 | 3.6% |
| Gold (GLD) | 37.0% | 27.1% | 1.14 | 2.8% |
| Commodities (DBC) | 48.7% | 18.0% | 2.12 | -11.7% |
| Real Estate (VNQ) | 12.9% | 13.5% | 0.65 | 17.6% |
| Bitcoin (BTCUSD) | -16.3% | 42.1% | -0.31 | 0.1% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with CVS | |
|---|---|---|---|---|
| CVS | 6.2% | 29.9% | 0.23 | - |
| Sector ETF (XLV) | 5.3% | 14.6% | 0.18 | 41.2% |
| Equity (SPY) | 12.8% | 17.1% | 0.59 | 26.3% |
| Gold (GLD) | 21.1% | 17.9% | 0.96 | -0.6% |
| Commodities (DBC) | 14.1% | 19.1% | 0.60 | 4.5% |
| Real Estate (VNQ) | 3.3% | 18.8% | 0.08 | 23.7% |
| Bitcoin (BTCUSD) | 7.0% | 56.0% | 0.34 | 9.2% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with CVS | |
|---|---|---|---|---|
| CVS | 1.6% | 29.2% | 0.11 | - |
| Sector ETF (XLV) | 9.3% | 16.5% | 0.45 | 50.5% |
| Equity (SPY) | 15.0% | 17.9% | 0.72 | 40.1% |
| Gold (GLD) | 13.5% | 16.0% | 0.70 | -1.4% |
| Commodities (DBC) | 9.4% | 17.8% | 0.44 | 11.4% |
| Real Estate (VNQ) | 5.7% | 20.7% | 0.24 | 33.9% |
| Bitcoin (BTCUSD) | 68.2% | 66.9% | 1.07 | 7.1% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 5/6/2026 | 7.6% | ||
| 2/10/2026 | -0.1% | 3.2% | -0.1% |
| 10/29/2025 | -1.9% | -5.0% | -2.8% |
| 7/31/2025 | -0.3% | 2.0% | 15.8% |
| 5/1/2025 | 4.1% | 0.1% | -4.0% |
| 2/12/2025 | 14.9% | 20.7% | 19.5% |
| 10/18/2024 | -5.2% | -10.9% | -15.5% |
| 8/7/2024 | -3.2% | -4.3% | -0.5% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 12 | 16 | 11 |
| # Negative | 13 | 8 | 13 |
| Median Positive | 4.6% | 3.1% | 7.4% |
| Median Negative | -2.9% | -5.0% | -5.3% |
| Max Positive | 14.9% | 20.7% | 19.9% |
| Max Negative | -16.8% | -17.7% | -17.2% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 03/31/2026 | 05/06/2026 | 10-Q |
| 12/31/2025 | 02/10/2026 | 10-K |
| 09/30/2025 | 10/29/2025 | 10-Q |
| 06/30/2025 | 07/31/2025 | 10-Q |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 02/12/2025 | 10-K |
| 09/30/2024 | 11/06/2024 | 10-Q |
| 06/30/2024 | 08/07/2024 | 10-Q |
| 03/31/2024 | 05/01/2024 | 10-Q |
| 12/31/2023 | 02/07/2024 | 10-K |
| 09/30/2023 | 11/01/2023 | 10-Q |
| 06/30/2023 | 08/02/2023 | 10-Q |
| 03/31/2023 | 05/03/2023 | 10-Q |
| 12/31/2022 | 02/08/2023 | 10-K |
| 09/30/2022 | 11/02/2022 | 10-Q |
| 06/30/2022 | 08/03/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q1 2026 Earnings Reported 5/6/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Total revenues | 405.00 Bil | ||||||
| 2026 Diluted earnings per share | 6.24 | 6.34 | 6.44 | 5.0% | Raised | Guidance: 6.04 for 2026 | |
| 2026 Adjusted EPS | 7.3 | 7.4 | 7.5 | 4.2% | Raised | Guidance: 7.1 for 2026 | |
| 2026 Cash flow from operations | 9.50 Bil | 5.6% | Raised | Guidance: 9.00 Bil for 2026 | |||
Prior: Q4 2025 Earnings Reported 2/10/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 GAAP Diluted EPS | 5.94 | 6.04 | 6.14 | Higher New | |||
| 2026 Adjusted EPS | 7 | 7.1 | 7.2 | Higher New | |||
| 2026 Cash Flow from Operations | 9.00 Bil | Higher New | |||||
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Nelson, Steven H | EVP and President, Aetna | Trust | Buy | 1262026 | 53.70 | 24 | 1,289 | 1,289 | Form |
| 2 | Capozzi, Heidi B | EVP and Chief People Officer | Trust | Buy | 10142025 | 56.85 | 35 | 1,990 | 4,832 | Form |
| 3 | Capozzi, Heidi B | EVP and Chief People Officer | Trust | Buy | 10142025 | 62.24 | 10 | 622 | 3,112 | Form |
| 4 | Capozzi, Heidi B | EVP and Chief People Officer | Trust | Buy | 10142025 | 56.47 | 35 | 1,976 | 2,259 | Form |
| 5 | Finucane, Anne A | Trust | Sell | 8292025 | 71.02 | 7,500 | 532,650 | 1,573,519 | Form |
CVS Trade Sentinel
UNDERWEIGHT (Score 3-4)
CONVICTION RATIONALE
The stock receives a low conviction score because the risk-reward is negatively skewed. While the Aetna turnaround is a tangible positive, it is overshadowed by a high-impact, structural regulatory risk to the PBM business, which constitutes nearly half of total revenue. The stock's low multiple correctly reflects this risk, making it a classic 'Value Trap' where the apparent cheapness is not a mispricing but a fair assessment of a contested business model under significant pressure.
STOCK ARCHETYPE
Type B: 'Quality Compounder / Stalwart'CVS is a mature, large-cap company with a significant market position. The investment thesis is not centered on hyper-growth, but on earnings consistency, capital efficiency (improving Aetna's margins), and shareholder returns. It is evolving its business model through vertical integration, characteristic of a stalwart adapting to maintain its competitive edge.
INVESTMENT THESIS
The primary driver for upside is the successful turnaround and margin expansion of the Health Care Benefits (Aetna) segment. By integrating its insurance arm with its newly acquired care delivery assets (Oak Street Health, Signify Health) and existing retail footprint, CVS aims to lower total medical costs for its Aetna members, which directly improves the segment's profitability and drives EPS growth.
- In Q1 2026, the Health Care Benefits segment's adjusted operating income increased 52.6% YoY to $3.0 billion.
- The Medical Loss Ratio (MLR) improved significantly to 84.6% in Q1 2026 from 87.3% in the prior year.
- The company raised its full-year 2026 guidance following the strong performance of the Aetna segment.
- The acquisitions of Oak Street Health and Signify Health for ~$19 billion signal a strategic commitment to controlling the care delivery value chain.
PRIMARY RISK
The largest segment by revenue, Health Services (Caremark PBM), faces structural risk from widespread regulatory scrutiny. Federal and state legislation targeting PBM pricing models, such as spread pricing and rebate retention, could permanently impair the segment's profitability. This is not a cyclical issue but a fundamental challenge to the business model.
- The Health Services segment's adjusted operating income decreased by 7.1% YoY in Q1 2026, attributed to 'pharmacy client price improvements' (concessions).
- The FTC is in active litigation against Caremark for anticompetitive rebating practices.
- CVS faces a class-action RICO lawsuit (March 2026) and a DOJ lawsuit (Dec 2024) related to its PBM and pharmacy operations.
- The top three PBMs, including Caremark, control ~80% of the market, making them a primary target for regulatory action aimed at lowering drug costs.
| KPI | Threshold | Rationale |
|---|---|---|
| Health Care Benefits Medical Loss Ratio (MLR) | Sustainably < 85% | This is the primary indicator of the Alpha Driver's success. A sustained low MLR proves the 'payvider' model is generating real cost savings and margin expansion in the Aetna segment. |
| Health Services Adjusted Operating Income YoY Growth | Stabilization ( > -5%) | This is the key metric for the Anti-Alpha thesis. Further declines signal accelerating client pricing pressure and regulatory impact, while stabilization would suggest the headwinds are manageable. |
| FTC / DOJ Rulings or PBM Legislation Newsflow | Any major adverse ruling or legislative action | This is a binary catalyst. A definitive negative outcome would be the primary trigger for the downside scenario, overriding other operational metrics. |
Integrated Synergies vs. Regulatory Siege
BULL VIEW
Aetna's improving Medical Loss Ratio (MLR), driven by integrated care synergies, will deliver enough profit growth to more than offset headwinds in the PBM segment.
CORE TENSION
Can the Aetna 'payvider' model's margin expansion outrun the structural regulatory assault on the PBM business, which is the company's largest revenue source?
PREVAILING SENTIMENT
Aetna's Health Care Benefits segment's adjusted operating income increased 52.6% YoY in Q1 2026, while the PBM-led Health Services segment's operating income decreased 7.1%.
BEAR VIEW
Federal/state action will cripple PBM profitability through measures like spread pricing bans, fundamentally impairing the largest segment and leading to significant earnings misses.
| Timeline | Event & Metric To Watch |
|---|---|
Late July / Early August 2026 | Q2 2026 Earnings Call Watch: Health Services Adjusted Operating Income YoY Growth vs. Q1's -7.1%. Stabilization above -5% is the key hurdle. |
Anytime (Next 6 months) | FTC Ruling or Settlement in Caremark Litigation Watch: Binary Headline: Any major adverse ruling or a settlement forcing changes to rebate practices. |
Late October / Early November 2026 | Q3 2026 Earnings Call Watch: Health Care Benefits Medical Loss Ratio (MLR) vs. the 84.6% baseline from Q1. Must remain below 85%. |
November 2026 | DSCSA Full Implementation Deadline Watch: Newsflow from CVS or drug wholesalers regarding supply chain exceptions or quarantined products due to compliance failures. |
| Date | Event | Stock Impact |
|---|---|---|
Oct 29, 2025 | Q3 2025 Earnings Details: Despite beating estimates, the stock fell as investors focused on underlying pressures, a precursor to the bifurcated results seen in subsequent quarters. | Slight -1.95% pullback $80.81 -> $79.24 |
Dec 9, 2025 | Investor Day and Guidance Update Details: Company hosted its investor day, providing updated financial guidance for the upcoming year and reinforcing its long-term strategy for the integrated 'payvider' model. | Rose significantly by 2.23% $75.24 -> $76.92 |
Feb 4, 2026 | FTC Settles with Key PBM Competitor Details: The FTC settled its case with peer Express Scripts, leaving CVS Caremark and OptumRx as the remaining defendants in a major investigation, increasing CVS's perceived legal risk. | Fell notably by -2.07% $76.16 -> $74.58 |
Mar 2, 2026 | Class-Action RICO Lawsuit Filed Details: A class-action RICO lawsuit was filed related to alleged fraudulent practices in PBM contracts. The market initially shrugged off the news. | Rose significantly by 2.2% $79.20 -> $80.94 |
May 6, 2026 | Q1 2026 Earnings and Guidance Raise Details: Reported strong Q1 results, with Health Care Benefits MLR improving to 84.6%. Raised full-year 2026 guidance. This was offset by a 7.1% drop in Health Services operating income. | Stock surged +7.65% $80.69 -> $86.86 |
Position Sizing
1% - 3%
CONSERVATIVE
The stock is in a moderate volatility regime, but near-term fear is spiking. The Bearish sentiment, 'Value Trap' valuation, and Contested moat create a high-risk profile, forcing a Conservative sizing until the significant regulatory overhang is resolved.
Diversification Alternatives
MOH
SECTORMolina offers a purer play on the managed care thesis (Aetna's strength) without the structural risk from PBM regulation or the drag from low-margin retail.
HUM
SECTORHumana is a best-in-class operator highly levered to Medicare Advantage, the primary growth and margin engine within CVS's strongest segment, but without the PBM/Retail issues.
CVS Health is re-rating from a slow-growth retail pharmacy to a vertically-integrated healthcare provider, driven by the synergy between its Aetna insurance arm, Caremark PBM, and its recent acquisitions of primary care (Oak Street Health) and home health (Signify Health) providers.
Filter all news through the lens of the integrated 'payvider' model. The key question is whether owning clinics and home health assets can demonstrably lower medical costs for the Aetna insurance business, thereby expanding margins.
Sustained improvement in the Health Care Benefits (Aetna) segment's Medical Loss Ratio below 85%; evidence of cost synergies from Oak Street and Signify Health integration; market share gains in Medicare Advantage; positive PBM contract renewals.
Regulatory action against PBMs (e.g., forced pricing transparency or rebate sharing); government reimbursement rate cuts for Medicare Advantage plans; failure to achieve targeted margins in the Aetna business; significant decline in retail prescription volumes.
Minor quarterly fluctuations in retail front-store sales; single-state regulatory headlines without federal impact; competitor store openings/closings; short-term drug price inflation that impacts all players.
Repricing Catalyst
The successful turnaround of the Health Care Benefits (Aetna) segment. In Q1 2026, the segment's adjusted operating income soared 52.6% YoY to $3.0 billion, and the medical loss ratio improved to 84.6% from 87.3% a year prior. This demonstrates improved cost control and execution, which is the core of the bull thesis for integrating insurance with healthcare delivery services like Oak Street Health.
Health Services (PBM & Specialty Pharmacy)
$192.9B TTM (48% of Total) · 4.6% MarginWhat It Is
Pharmacy Benefit Management (PBM) services via CVS Caremark; Specialty pharmacy dispensing; Home infusion services via Coram; Primary care clinics via Oak Street Health; Home health services via Signify Health.
Who Pays & How
Employers, health insurance companies, and government entities pay CVS Caremark to manage their prescription drug benefits, seeking to control costs through Caremark's large scale, negotiated rebates from drug manufacturers, and formulary management. The primary moat is scale; Caremark is one of three PBMs that control ~80% of the U.S. market.
Competition
Health Care Benefits (Aetna Insurance)
$143.9B TTM (36% of Total) · 15.4% MarginWhat It Is
Commercial, Medicare, and Medicaid health insurance plans under the Aetna brand.
Who Pays & How
Employers and government agencies (Centers for Medicare & Medicaid Services) pay premiums for health insurance coverage for their employees and beneficiaries. Members choose Aetna for its network of doctors and hospitals and its plan benefits.
Competition
Pharmacy & Consumer Wellness (Retail)
$128.0B TTM (16% of Total) · 3.7% MarginWhat It Is
Prescription drugs and front-store consumer health and general merchandise sold through ~9,000 retail locations; in-store health services via MinuteClinic.
Who Pays & How
Consumers pay for prescriptions (often with insurance co-pays) and front-store items. They choose CVS for convenience, location, and insurance network inclusion.
Competition
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