CVS Health’s (CVS) shares edged higher on Friday morning after the retail pharmacy chain’s fourth-quarter earnings beat expectations despite a 62% fall in profit in 2025.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
During the final three months of 2025, the Rhode Island-based company posted adjusted earnings per share of $1.09 on revenue of $105.7 billion. Both comfortably exceeded analysts’ EPS consensus of $1.0 and revenue of $103.57 billion.
CVS Health Sees Dip in Profit in 2025
In addition, EPS fell 8.4% year-over-year, but revenue climbed 8.25% from $97.7 billion seen in the year-ago quarter.
However, the company’s net income plunged 62% in 2025, from $4.57 billion to $1.73 billion, despite quarterly profit climbing 80% from the same period last year to $2.9 billion.
What Fueled Revenue Growth in Q4?
For the revenue growth seen during the quarter, CVS Health’s health services segment accounted for the biggest portion, with earnings rising 9% from the year-ago quarter to $51.2 billion.
However, the largest quarterly growth came from the pharmacy and consumer wellness segment, whose revenue grew 12% to $37.6 billion.
This is followed by the healthcare benefit segment, whose revenue grew 10% to $36.3 billion. This segment houses Aetna, which provides insurance coverage, including under the Medicare and Medicaid health programs.
CVS Health Eyes Margin Growth in Medicare Business
Looking ahead, CVS Health expects more “tremendous earnings power” in Aetna. It also anticipates margin improvement in its Medicare business in 2026 despite being “disappointed” in the advanced rate notice that has been issued for 2027 — the firm sees the rate as failing to match the spike in the cost of healthcare plans in the U.S.
For its Medicaid business, CVS Health noted that it has a cautious outlook for 2026. The firm projects at least $400 billion in revenue for the new fiscal year, below the consensus of $409.2 billion.
Is CVS Health a Good Stock to Buy?
On Wall Street, CVS Health’s shares remain a Strong Buy based on analysts’ consensus rating. This breaks down to 16 Buys and one Hold issued over the past three months.
Moreover, the average CVS price target of $95.94 implies about 24% upside. However, analysts’ estimates may change following the latest earnings report.
