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CVS Health
(NYSE:CVS)
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Rating:62Neutral
Price Target:
$111.00
▲(3.03% Upside)
Action:Reiterated
Date:08/05/26
The score is driven primarily by mixed financial performance—strong and improving cash flow plus deleveraging, but materially compressed margins and low ROE. The earnings call meaningfully supports the outlook due to raised EPS and cash flow guidance, partially offset by stated 340B and 2027 Caremark membership risks. Technicals are broadly trend-supportive but momentum is muted, and valuation is a notable drag given the high P/E versus only a moderate dividend yield.
Positive Factors
Specialty pharmacy leadership
Consistently high specialty adherence (>90%) is a durable competitive advantage: it strengthens relationships with payers and manufacturers, supports higher-margin specialty dispensing and clinical services, and increases patient stickiness and long-term revenue visibility in specialty care.
Negative Factors
Compressed profitability & low ROE
Very low margins and depressed return on equity reflect weaker earnings quality and less capacity to generate returns from the asset base. This structural profitability compression limits reinvestment capacity, reduces resilience to pricing/regulatory shocks, and constrains long-term shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Specialty pharmacy leadership
Consistently high specialty adherence (>90%) is a durable competitive advantage: it strengthens relationships with payers and manufacturers, supports higher-margin specialty dispensing and clinical services, and increases patient stickiness and long-term revenue visibility in specialty care.
Read all positive factors
CVS Health Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales across different business units, revealing which areas contribute most to growth and where the company might face challenges or opportunities.
Breaks down sales across different business units, revealing which areas contribute most to growth and where the company might face challenges or opportunities.
Data provided by:
The Fly
The FlyCVS Health (CVS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$122.40B
Dividend Yield2.78%
Average Volume (3M)7.39M
Price to Earnings (P/E)25.0
Beta (1Y)0.43
Revenue Growth7.41%
EPS Growth6.51%
CountryUS
Employees259,500
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)3.83
Shares Outstanding1,278,970,300
10 Day Avg. Volume8,144,975
30 Day Avg. Volume7,388,255
Financial Highlights & Ratios
PEG Ratio-0.92
Price to Book (P/B)1.34
Price to Sales (P/S)0.25
P/FCF Ratio12.88
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$113.75Price Target Upside5.58% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
EPS Forecast (FY)7.89
Revenue Forecast (FY)$415.25B
CVS Health Business Overview & Revenue Model
Company Description
CVS Health Corp. is a health solutions company, which engages in the provision of healthcare services. It operates through the following segments: Health Care Benefits, Health Services, Pharmacy and Consumer Wellness, and Corporate and Other. The ...
How the Company Makes Money
CVS Health makes money primarily by (1) collecting premiums and other administrative/service revenue in its health insurance business, (2) earning fees and margins in its pharmacy services and pharmacy benefit management (PBM) business, and (3) ge...
CVS Health Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum across segments with material upside: double-digit growth in operating income, raised EPS guidance, improved cash flow outlook, specialty leadership, and early tangible AI-driven efficiencies. Offsetting these positives are notable industry-specific headwinds—most prominently near-term 340B pressures, anticipated Caremark membership declines in 2027, ongoing reimbursement and regulatory pressures, and some timing-related pull-forwards. Management emphasized disciplined execution, balance sheet improvement and a multi-year growth outlook (mid-teens EPS CAGR through 2028), while acknowledging and preparing for specific near-term headwinds.Positive Updates
Strong top-line performance
Total revenue exceeded $106 billion in Q2 2026, an increase of over 7% year-over-year, with full year 2026 total revenues now expected to be at least $414 billion.
Negative Updates
340B program pressure
Management disclosed pressure in the 340B business during the quarter driven by a dynamic program environment and manufacturer restrictions; they expect 340B to be a headwind into 2027 (no specific dollar amount provided).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong top-line performance
Total revenue exceeded $106 billion in Q2 2026, an increase of over 7% year-over-year, with full year 2026 total revenues now expected to be at least $414 billion.
Read all positive updates
Company Guidance
CVS raised its full‑year 2026 outlook, increasing adjusted EPS guidance to $7.90–$8.10 (up $0.60, ~+8%), raising expected cash flow from operations to at least $11.5B (up ~$2B), and targeting total revenues of at least $414B; enterprise adjusted operating income is now expected to be $16.58–$16.92B, Health Care Benefits adjusted operating income $5.03–$5.37B (up >$1B), with an expected MBR of 89.75% ±25 bps, Pharmacy & Consumer Wellness adjusted operating income at least $6.4B (up $220M) and Health Services outlook reiterated; management noted Q2 results of $5.2B adjusted operating income and $2.58 adjusted EPS, YTD cash flow from operations of ~$10.6B, parent cash of ~$2.7B and leverage of ~3.5x, said no share repurchases are assumed in the current outlook, expects second‑half EPS weighted to Q3, anticipates the Q1–Q4 MBR increase in Health Care Benefits to be slightly above 950 bps (adjusted for prior‑year development), reiterated a mid‑teens adjusted EPS CAGR for 2025–2028, and provided preliminary 2027 context implying a reasonable floor of at least $8.44 (≈13% growth off a $7.46 adjusted baseline, excluding prior‑year development and individual‑exchange items).CVS Health Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
60
Neutral
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 415.09B | 402.07B | 372.81B | 357.78B | 322.47B | 292.11B |
| Gross Profit | 58.75B | 55.36B | 51.40B | 54.43B | 54.50B | 52.12B |
| EBITDA | 12.29B | 9.86B | 13.68B | 18.20B | 12.35B | 17.53B |
| Net Income | 4.91B | 1.77B | 4.61B | 8.34B | 4.31B | 8.00B |
Balance Sheet | ||||||
| Total Assets | 253.77B | 261.06B | 253.22B | 249.73B | 228.28B | 233.00B |
| Cash, Cash Equivalents and Short-Term Investments | 13.96B | 10.66B | 10.99B | 11.46B | 15.72B | 12.53B |
| Total Debt | 76.31B | 93.59B | 82.92B | 79.39B | 70.73B | 76.00B |
| Total Liabilities | 173.87B | 185.68B | 177.49B | 173.09B | 156.51B | 157.62B |
| Stockholders Equity | 79.70B | 75.21B | 75.56B | 76.46B | 71.47B | 75.08B |
Cash Flow | ||||||
| Free Cash Flow | 15.16B | 7.81B | 6.33B | 10.39B | 13.45B | 15.74B |
| Operating Cash Flow | 19.03B | 10.64B | 9.11B | 13.43B | 16.18B | 18.27B |
| Investing Cash Flow | -7.72B | -5.87B | -7.61B | -20.89B | -5.05B | -5.26B |
| Financing Cash Flow | -10.74B | -4.94B | -1.14B | 2.68B | -10.52B | -11.36B |
CVS Health Technical Analysis
Neutral
107.74
Price Trends
101.46
Negative
91.14
Positive
84.01
Positive
Market Momentum
-1.21
Positive
32.01
Neutral
14.32
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVS, the sentiment is Neutral. The current price of 107.74 is above the 20-day moving average (MA) of 104.54, above the 50-day MA of 101.46, and above the 200-day MA of 84.01, indicating a neutral trend. The MACD of -1.21 indicates Positive momentum. The RSI at 32.01 is Neutral, neither overbought nor oversold. The STOCH value of 14.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CVS.
CVS Health Risk Analysis
CVS Health disclosed 40 risk factors in its most recent earnings report. CVS Health reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CVS Health Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $369.69B | 26.28 | 14.40% | 2.13% | 6.46% | ― | |
68 Neutral | $85.49B | 17.68 | 11.24% | 1.82% | 6.27% | -4.37% | |
63 Neutral | $46.23B | 36.19 | 6.91% | 0.91% | 18.33% | -18.53% | |
62 Neutral | $122.40B | 24.98 | 6.43% | 2.47% | 7.41% | 6.51% | |
60 Neutral | $32.49B | -6.40 | -24.03% | ― | 13.89% | -356.11% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $10.25B | 1,242.75 | -0.17% | ― | 2.55% | -100.90% |
* Healthcare Sector Average
CVS
CVS Health
95.67
32.79
52.14%
CNC
Centene
66.57
41.32
163.64%
HUM
Humana
385.70
122.82
46.72%
MOH
Molina Healthcare
198.84
45.01
29.26%
UNH
UnitedHealth
408.74
162.95
66.30%
ELV
Elevance Health
397.70
112.89
39.64%
CVS Health Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
CVS Health Shareholders Approve New 2026 Incentive Plan
Positive
May 18, 2026
At its May 14, 2026 annual meeting, CVS Health stockholders approved a new 2026 Incentive Compensation Plan to replace the expiring 2017 plan, with the new framework applying to awards granted after that date and reinforcing the company’s lo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.