CVS Well being (CVS) earnings This fall 2025

CVS Well being on Tuesday reported fourth-quarter earnings and income that beat estimates and reaffirmed the 2026 revenue steering that impressed buyers, signaling regular progress within the health-care big’s turnaround plan. 

“’24 was a troublesome yr for the corporate. So ’25 righted the ship,” CVS CFO Brian Newman mentioned in an interview.

CVS, which operates one of many largest pharmacy chains within the U.S., sees full-year revenue coming in between $7 to $7.20 per share. That is in step with the $7.17 per share that analysts have been anticipating, in line with LSEG. 

Newman additionally mentioned the corporate is sustaining its 2026 income steering of at the least $400 billion. Analysts count on income of $409.77 billion, in line with LSEG, although it is unclear if these estimates account for all the headwinds Newman cited.

He mentioned that steering consists of $20 billion in headwinds, roughly half of which is pushed by the corporate’s transfer to exit the Reasonably priced Care Act particular person trade market this yr. Newman mentioned the opposite half displays the corporate’s retail enterprise adjusting to decrease drug costs after the “most favored nation” offers that President Donald Trump struck with greater than a dozen pharma firms in current months.

CVS final week mentioned its roughly 9,000 pharmacies are accepting low cost playing cards from the president’s newly launched direct-to-consumer platform, TrumpRx, for eligible sufferers. Newman mentioned CVS shares the Trump administration’s purpose of lowering prices. He added that the decrease costs set a brand new place to begin from which Caremark, the corporate’s pharmacy profit supervisor, can negotiate even decrease prices for its shoppers, “so we do not see these as type of adversarial relationships.”

CVS beforehand mentioned it expects development this yr to be pushed by the return to focus on margins at its recovering Aetna insurance coverage enterprise, led by privately run Medicare Benefit plans, and Caremark. 

Newman added that primary-care supplier Oak Road Well being is “enhancing its profitability” this yr. That comes after CVS moved to shut 16 underperforming Oak Road places. For the retail pharmacy enterprise, Newman mentioned the corporate has a number of tailwinds, akin to new technological investments and the places and new clients CVS acquired from Ceremony Help final yr after it filed for chapter.

Buyers rewarded CVS final yr as CEO David Joyner, who stepped into the function in late 2024, pressed forward with a sweeping restructuring geared toward reversing years of underperformance. The corporate has minimize prices, reshuffled management and exited weaker markets, serving to gas a roughly 40% inventory rise over the previous yr.

Here is what CVS reported for the fourth quarter in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by LSEG: 

• Earnings per share: $1.09 adjusted vs. 99 cents anticipated
• Income: $105.69 billion vs. $103.59 billion anticipated

The corporate posted internet earnings of $2.92 billion, or $2.30 per share, for the fourth quarter. That compares with internet earnings of $1.62 billion, or $1.30 cents per share, for a similar interval a yr in the past. 

Excluding sure objects, akin to restructuring expenses and capital losses, adjusted earnings have been $1.09 per share for the quarter.

CVS booked gross sales of $105.69 billion for the fourth quarter, up 8.2% from the identical interval a yr in the past, as all three of its enterprise segments confirmed development. 

The insurance coverage enterprise introduced in $36.29 billion in income through the quarter, up greater than 10% from the fourth quarter of 2024. 

Newman mentioned the unit delivered a “very robust” quarter and that he expects one other yr of margin enchancment, primarily pushed by Medicare Benefit. The corporate’s enterprise for these privately run Medicare plans is “persevering with the trail in the direction of goal margins” of three% to 4% by 2028, he mentioned.

Aetna and different insurers have grappled with higher-than-expected medical prices over the previous yr as extra Medicare Benefit sufferers return to hospitals for procedures they delayed through the pandemic. Whereas medical prices stay excessive, Aetna and different insurers, akin to UnitedHealthcare, look like turning into higher outfitted to navigate the problem shifting ahead.

Nonetheless, Newman mentioned “we are going to proceed the elevated traits. … I do not suppose it is too early to imagine something aside from a prudent outlook.”

The insurance coverage section’s medical profit ratio — a measure of complete medical bills paid relative to premiums collected — remained constant from the prior yr, at 94.8%. A decrease ratio usually signifies that an organization collected extra in premiums than it paid out in advantages, leading to greater profitability.

Newman mentioned the largest driver of that ratio within the fourth quarter was Medicaid pass-through funds that hit in late December.

In a launch, CVS additionally mentioned improved efficiency within the unit’s authorities enterprise was offset by shifts in Medicare drug value timing following adjustments underneath the Inflation Discount Act, which altered the standard seasonal sample of prescription spending.

Final month, shares of Medicare Benefit insurers took a success in January after the Trump administration proposed almost flat authorities fee charges to these plans in 2027. Newman mentioned he doesn’t imagine that the proposed fee displays medical value traits.

CVS has began a dialogue with the Facilities for Medicare and Medicaid Providers earlier than the company finalizes the speed discover at first of April, he added.

CVS’ pharmacy and client wellness division posted $37.66 billion in gross sales for the fourth quarter, up 12.4% from the identical interval a yr earlier.

CVS mentioned the rise got here partly from greater prescription quantity, together with from the corporate’s acquisition of prescriptions from Ceremony Help, however was offset by pharmacy reimbursement stress and the affect of some generic medicine coming into the market. 

That unit dispenses prescriptions in CVS’ greater than 9,000 retail pharmacies and gives different companies, akin to vaccinations and diagnostic testing.

CVS’ well being companies section generated $51.24 billion in income for the quarter, up 9% in contrast with the identical quarter in 2024. 

That unit consists of Caremark, which negotiates drug reductions with producers on behalf of insurance policy, creates lists of medicines, or formularies, which can be coated by insurance coverage, and reimburses pharmacies for prescriptions.