Overview

• US health solutions firm's Q1 revenue rose 6.2% yr/yr, beating analyst expectations

• Adjusted EPS for Q1 beat analyst expectations

• Company raised full-year 2026 GAAP and adjusted EPS guidance

Outlook

• CVS raises full-year 2026 GAAP diluted EPS guidance to $6.24-$6.44 from $5.94-$6.14

• Company lifts full-year 2026 adjusted EPS guidance to $7.30-$7.50 from $7.00-$7.20

• CVS expects full-year 2026 cash flow from operations of at least $9.5 bln, up from $9.0 bln

Result Drivers

• HEALTH CARE BENEFITS SEGMENT - Adjusted operating income rose 52.6%, driven by improved performance in Government business and the absence of a prior-year premium deficiency reserve

• HEALTH SERVICES SEGMENT - Revenue grew 11% on pharmacy drug mix and brand inflation, but adjusted operating income fell 7.1% due to continued pharmacy client price improvements

• PHARMACY & CONSUMER WELLNESS - Revenue was flat as higher prescription volume and Rite Aid asset contributions were offset by regulatory price reductions, generic drug introductions, and reimbursement pressure

Company press release: ID:nPn2JVLfZa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 23 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the healthcare facilities & services peer group is "buy"

• Wall Street's median 12-month price target for CVS Health Corp is $95.00, about 17.7% above its May 5 closing price of $80.69

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

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