CVS Health Corp. (NYSE:CVS) stock is surging on Wednesday after upbeat first-quarter earnings and 2026 guidance.

The health solutions company reported adjusted earnings of $2.57 per share, surpassing analyst estimates of $2.20.

Sales reached $100.43 billion, up 6.2% year over year, beating the consensus of $95.09 billion.

Adjusted operating income increased 12.5% to $5.15 billion, primarily driven by an increase in the Health Care Benefits segment.

Segment Performance Shows Diverging Trends

Revenues in the Health Care Benefits segment increased 3.3% to $35.97 billion, primarily driven by an increase in the Government business, partially offset by a decline as a result of the company’s exit from the individual exchange business in 2026.

Health Services segment (offering pharmacy benefit management) sales increased 11% to $48.24 billion, primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.

The Pharmacy & Consumer Wellness segment’s sales remained flat at $31.99 billion, primarily driven by pharmacy drug mix, increased prescription volume, largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions, and pharmacy reimbursement pressure.

Key Metrics Improve Despite Membership Decline

The medical benefit ratio (MBR) decreased to 84.6% compared to 87.3% a year ago, primarily driven by improved underlying performance in the Government business and the absence of the premium deficiency reserve recorded in the prior year, partially offset by lower favorable prior-year development.

Medical membership of 26 million decreased approximately 600 thousand members compared with December 31, 2025, reflecting the company’s exit from the individual exchange business in 2026, partially offset by an increase in Commercial ASC membership.

Prescriptions filled increased by 3.6% to 451.2 million, primarily driven by incremental volume from Rite Aid prescription file acquisitions and increased utilization, partially offset by the absence of long-term care pharmacy prescription volume following the deconsolidation of Omnicare.

CVS Health Raises 2026 Outlook

CVS Health raised fiscal 2026 adjusted earnings guidance from $7.00-$7.20 per share to $7.30-$7.50, compared to the consensus of $7.16.

The company expects 2026 sales of more than $405 billion, compared to prior guidance of at least $400 million and the Wall Street estimate of $404.87 billion.

CVS Health Expands Biosimilars Strategy Across Formularies

On Tuesday, CVS Health said it will update its core commercial template formularies to accelerate the adoption of lower-cost biosimilars across several therapeutic areas.

Effective July 1, 2026, CVS Caremark will prioritize FDA-approved biosimilars—many designated as interchangeable and with no clinically meaningful differences versus reference products—over select branded drugs.

As part of the shift, the formulary will move away from Johnson & Johnson’s (NYSE:JNJ) Stelara (ustekinumab) in favor of lower-cost interchangeable biosimilars, including Pyzchiva and Yesintek.

CVS said most members will face $0 out-of-pocket costs for these therapies following the change.

CVS Health Price Action

CVS Price Action: CVS Health shares were up 6.09% at $85.60 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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