CVS Health Stock Gains on Guidance Raise. How It Expects to Perform in 2025 and Beyond.

CVS Health raised its full-year guidance for revenue and adjusted earnings ahead of its investor day. (Photograph by Justin Sullivan/Getty Images)

Key Points

• CVS Health updates its 2025 full-year guidance, projecting total revenue of at least $400 billion, exceeding prior estimates and analysts’ forecasts.
• The company raises its 2025 adjusted earnings per share outlook to $6.60 to $6.70, up from the previous range of $6.55 to $6.65.
• CVS introduces a mid-teens adjusted earnings compound annual growth rate for the next three years, reflecting strong business performance.

CVS Health issued an update to its full-year guidance Tuesday ahead of its annual investor day, pointing to stronger performance in 2025 than previously expected.

CVS now sees total revenue of at least $400 billion, up from $397.3 billion previously and above Wall Street’s forecast for $398.4 billion, according to FactSet.

The owner of the drugstore chain and insurance giant Aetna guided for adjusted earnings in the range of $6.60 to $6.70 a share, compared with a prior range of $6.55 to $6.65. Analysts were looking for $6.62 a share.

On a non-adjusted basis, CVS expects to post a loss of 32 cents to 22 cents a share, narrower than a previous outlook for a loss of 34 cents to 24 cents.

“We are committed to doing what we say,” Chief Financial Officer Brian Newman vowed in a statement. “Our guidance philosophy is centered on providing credible and clear expectations with opportunities for outperformance.”

CVS anticipates revenue of at least $400 billion in 2026, versus analysts’ calls for $420.3 billion. The company sees adjusted earnings of between $7 and $7.20 a share, below the $7.17 Wall Street is projecting at the midpoint of the range.

CVS also introduced guidance for a mid-teens adjusted earnings compound annual growth rate over the next three years, saying the figure reflects “continued strong performance” from the company’s “unique collection of businesses.”

Shares climbed 3.2%, making CVS one of the biggest gainers in the S&P 500 on Tuesday. The benchmark index was up 0.2%.

Molina Healthcare and Cardinal Health were also getting a boost, rising 0.8% and 0.4%, respectively. Cardinal is a major pharmaceutical distributor that stocks CVS Health’s pharmacies, while Molina partners with its CVS Caremark subsidiary.

CVS posted higher-than-expected revenue and profit in its latest quarter, though its medical loss ratio—which reflects the proportion of premiums paid out to cover patients’ health expenses—came in slightly above consensus estimates. CVS and healthcare peers have grappled with higher-than-anticipated medical spending since the pandemic.

Still, the stock has gained 76% this year, making it a standout in a challenged industry. Cigna Group has fallen 4.4% this year, while UnitedHealth Group has slumped 36%, straggling behind double-digit percentage gains for the S&P 500.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com