CVS Health on Wednesday raised its full-year earnings outlook for 2026, citing a stronger-than-expected second quarter in which the company benefited from a more lucrative pharmacy drug mix and bonus payments tied to high ratings for its government health plans.
The company now expects adjusted earnings per share for 2026 to fall in the range of $7.90 to $8.10, up from its prior forecast of $7.30 to $7.50. Analysts surveyed by LSEG had been forecasting full-year EPS of $7.45.
For the quarter, CVS, which operates a retail pharmacy chain, a health insurer and a pharmacy benefits management unit, reported adjusted profit of $2.58 per share, topping analyst expectations of $1.85. Quarterly revenue increased to $106.1 billion from $98.9 billion, exceeding consensus estimates of $100.11 billion.
Executives said the pharmacy business benefited from a change in the mix of medicines dispensed, leading to stronger profitability in the period. In addition, high Star ratings for the company’s government-backed Medicare plans generated bonus payments that supported results.
CVS also confirmed a new MinuteClinic offering: $29 appointments for adults seeking weight-loss drug consultations for medicines that include Novo Nordisk’s Wegovy and Eli Lilly’s Foundayo and Zepbound. MinuteClinic provides both walk-in and virtual care services.
The quarterly report marks the sixth straight quarter in which CVS has beaten Wall Street estimates, a run that the company says reflects progress in restoring investor confidence, particularly in its Aetna insurance business after missed targets in earlier quarters of 2024.
Aetna’s quarterly medical loss ratio - the share of premiums spent on medical care - improved to 87.4% from 89.9% a year earlier, better than estimates of 90.03%. A CVS Health spokesperson said, "We’ve continued to make progress on our multi-year margin recovery in Aetna, and this has been boosted by our multi-year industry-leading Star ratings, a measurement of member outcomes and experience."
Operating profit at CVS’s health services unit, which includes clinics and other care-delivery assets, rose 10% to $1.73 billion from $1.58 billion. Management attributed part of the gain to operational changes at Oak Street Health, the primary care business focused on older adults.
This year, CVS said it would slow Oak Street’s expansion and close 16 underperforming locations as it adjusts the unit’s footprint.
CVS first raised its guidance earlier this year after beating first-quarter estimates and controlling medical costs. Nevertheless, the company continues to report that medical costs within its Aetna business remain above historical norms.
Company results were broadly in line with those reported by peer UnitedHealth, which had upgraded its own forecast in July on the back of improved medical cost controls. That move by a large rival has set higher expectations across the health insurer sector this earnings season.
Insurers more broadly have been grappling with persistently elevated costs over the past three years driven by increased utilization in government-backed plans. To address pressure on margins, many carriers have been raising premiums, trimming benefits and withdrawing less profitable plan options from certain markets.
While CVS upgraded its outlook for the year, the company said it would remain prudent in its planning. Management pointed to continuing elevated cost trends in medical care and the possibility of a challenging macroeconomic backdrop as reasons for maintaining a cautious stance.
The quarter’s results and the revised guidance underscore the interplay between retail pharmacy operations, insurer earnings and care-delivery units within CVS’s diversified business model. The boost from pharmacy drug mix and plan-related bonuses helped offset ongoing cost pressures in Aetna and shaped the company’s decision to lift its full-year earnings forecast.