CVS Raises Profit Outlook in Sign of Momentum for 2026
Pharmacy and Retail Store's Outlook Suggests It Expects to Manage Volatile Environment That Has Posed Challenges for All Its Businesses
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CVS Health Corp. raised its full-year profit forecast and said earnings would rise in 2026, a sign of hope as it navigates a turbulent retail environment and government scrutiny across the health care industry.
Adjusted earnings would be as much as $7.20 per share in 2026, the health conglomerate said in a Dec. 9 statement. Analysts had expected $7.17 per share on average. The company also said it expects a profit this year of $6.60 to $6.70 a share, a 5-cent increase from its prior forecast.
CVS Health ranks No. 18 on the Transport Topics sector list of thetop wholesale/retail carriers.
The outlook suggests CVS expects to manage a volatile environment that has posed challenges for all three of its businesses. Health insurance plans are facing greater government scrutiny, and drug benefit managers are changing their business practices, while retail pharmacies are struggling to increase their profits.
The positive guidance for next year, and the increase in this year’s outlook, “should set the stage for what remains a robust growth recovery story,” analysts from Leerink Partners said in a note to clients.
CVS shares rose 3% at 2:23 pm in New York.
“We see all of our businesses growing next year,” said Chief Financial Officer Brian Newman, the former UPS executive who was hired in April.Profit from the pharmacy segment is projected to grow 1% and at least break even for the foreseeable future, he said. That’s an upgrade from the company’s previous expectation that the unit’s profitability would shrink 5% each year.
CVS is aiming to achieve Medicare Advantage margins of 3% to 4% in the Aetna insurance business, down from the previous guidance of 3% to 5%, it said. Medicare Advantage, the private version of the government health plan for seniors, has historically beenmore profitablethan other types of health plans and has faced increasing scrutiny from the government.
Aetna President Steve Nelson said the range has narrowed because of changes from the Inflation Reduction Act on Medicare Part D payments. The narrowing is more of a “fine-tuning” than a “fundamental change,” he said, based on effects across the whole industry.
The company, which brought in anew CEO, David Joyner, in October 2024, has performed well this year, with shares rising more than 70% through the close of Dec. 8.
In October, the completion of its acquisition of select Rite Aid assets nationwide.
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