CVS Health (CVS) Stock Forecast & Price Target

CVS Health demonstrated strong financial performance, reporting Health Services revenue of $49.27 billion, which grew by 11.6% year-over-year and surpassed expectations, significantly driven by improvements in pharmacy drug mix and brand inflation despite some price pressures. Additionally, the company's retail pharmacy segment saw an increase in script share to approximately 28.9% and a notable 400 basis points of growth in immunization market share, indicating a successful expansion in its core offerings. With a robust 25% year-over-year revenue growth in Healthcare Delivery, particularly due to increased patient volumes at Oak Street Health, CVS Health is well-positioned for continued growth and synergies across its diverse healthcare services.

CVS Health faces significant challenges that contribute to a negative outlook, driven by anticipated headwinds in Medicare Advantage (MA) utilization, which could result in fiscal year 2026 earnings per share (EPS) being approximately 5% below current estimates. Additionally, a year-over-year decline of 7.0% in segment Adjusted Operating Income (AOI) and a 1.8% decrease in claims processed further highlight operational weaknesses, compounded by a stock valuation potentially declining to 9.8 times earnings, aligning with non-government peers. Further complicating the financial landscape are risks of membership losses, increased regulatory scrutiny, and heightened competition in the retail market, all of which threaten CVS's market position and profitability.