New York / Hartford – December 10, 2025 – CVS Health Corporation (NYSE: CVS) is back in Wall Street’s good graces. After a bruising 2024, the stock has staged a powerful rebound in 2025 as management raised its 2025–2026 profit outlook, unveiled an AI‑native engagement platform, and tightened its primary‑care strategy.
Shares were trading around $78 per share in midday trading on December 10, up roughly 2% on the day and around 75–80% year to date, far outpacing most large-cap healthcare peers. [1]
With a market capitalization close to $100 billion, CVS has reasserted itself as one of the largest diversified health services companies in the U.S. [2]
Investor Day 2025: Higher Guidance and a Multi‑Year Growth Plan
At its 2025 Investor Day on December 9 in Hartford, CVS updated its financial guidance and laid out a new long‑term strategy centered on disciplined execution, improved consumer experience, and “Engagement as a Service,” an AI‑driven technology platform. [3]
Raised 2025 outlook
CVS now expects for full‑year 2025: [4]
- Revenue: at least $400 billion (up from at least $397.3 billion previously)
- GAAP operating income: $4.37–$4.54 billion (slightly higher than prior range)
- Adjusted operating income: $14.22–$14.39 billion (modestly higher)
- GAAP EPS: a loss of $0.32 to $0.22 per share (narrower loss than previously guided)
- Adjusted EPS:$6.60–$6.70, raised from $6.55–$6.65
- Operating cash flow: unchanged at $7.5–$8.0 billion
Financial media from The Wall Street Journal, Barron’s, MarketWatch, and Investopedia all highlighted that the revised outlook is slightly ahead of prior guidance and above most analyst expectations, helping push CVS shares higher into the event. [5]
2026 guidance and EPS growth through 2028
For 2026, CVS is initiating guidance of: [6]
- Revenue: at least $400 billion
- GAAP EPS:$5.94–$6.14
- Adjusted EPS:$7.00–$7.20
- Operating cash flow:at least $10 billion
Management also committed to a mid‑teens adjusted EPS compound annual growth rate (CAGR) through 2028, signaling a multi‑year profit expansion plan built on better margins in health insurance (Aetna), PBM operations (CVS Caremark), steady retail pharmacy earnings, and a path to profitability in the Health Care Delivery segment. [7]
For investors, that translates into a company telling the market: the painful reset is largely behind us, and earnings should grow faster than revenue in the back half of the decade.
Q3 2025: Strong Adjusted Results Behind a Big Accounting Hit
The Investor Day message builds on Q3 2025 results released October 29, which showed why CVS can raise guidance even while reporting a headline loss. [8]
Key Q3 numbers:
- Revenue:$102.9 billion, up 7.8% year over year – a record quarterly high
- GAAP EPS: a loss of $3.13 per share, driven by a $5.7 billion goodwill impairment in Health Care Delivery (Oak Street Health, Signify Health, and related assets)
- Adjusted EPS:$1.60, up from $1.09 a year earlier – a 47% increase
- Year‑to‑date operating cash flow:$7.2 billion
According to CVS and Reuters, the huge impairment reflects revised assumptions for growth and profitability in primary‑care and home‑health assets, as the company slows clinic expansion and reacts to higher medical costs and changing Medicare economics. [9]
At the same time, the Health Care Benefits (Aetna) segment swung from an adjusted operating loss a year ago to strong profit, with improved medical loss ratios and better performance in government programs. [10]
Reuters notes that Q3 marked the fourth consecutive quarter that CVS beat Wall Street earnings estimates, reinforcing a perception that the turnaround under CEO David Joyner is gaining traction. [11]
Oak Street Health Clinics: Strategic Pullback, Not Abandonment
A major sub‑plot in the CVS story is its $10.6 billion acquisition of Oak Street Health in 2023 and the subsequent rethink of that strategy. [12]
In late October 2025, CVS confirmed it will close 16 Oak Street primary‑care clinics—about 7% of the network—by the end of February 2026, leaving roughly 230 clinics across 27 states. The company had once planned to expand to 300 centers. [13]
A CVS spokesperson told Becker’s Hospital Review that the move is aimed at making Oak Street “sustainable” amid elevated medical costs, changes to Medicare risk adjustment, and shifting payer dynamics. [14]
In parallel, CVS recorded:
- A $5.73 billion writedown across its healthcare delivery businesses (including Oak Street and Signify)
- An $83 million charge associated with clinic closures
Those charges underscore that CVS likely overpaid or over‑estimated growth for primary‑care assets in a tougher reimbursement environment. But they also clean up the balance sheet and give the new management team room to reset expectations. [15]
AI‑Native “Engagement as a Service” Platform
One of the headline announcements from Investor Day is CVS’s plan to build an “open consumer engagement platform” that will act as an AI‑native layer connecting Aetna, CVS Caremark, CVS Pharmacy, and Health Care Delivery partners in a single experience, anchored in a single app. [16]
According to CVS, the platform will: [17]
- Integrate health data and interactions across insurance, pharmacy, clinics, and virtual care
- Use artificial intelligence to personalize outreach, anticipate care needs, and streamline navigation
- Reduce hospital readmissions and lower costs by improving medication adherence and care coordination
- Create new monetization opportunities by offering “Engagement as a Service” to third‑party health plan and provider partners
Financial outlets like Investopedia and The Wall Street Journal frame this as a bet that better digital engagement can both improve health outcomes and expand margins, particularly as CVS leans more heavily on technology instead of expensive bricks‑and‑mortar growth. [18]
Leadership: David Joyner Consolidates Control
CVS’s strategy is being driven by David Joyner, a long‑time company executive who became President and CEO in October 2024, succeeding Karen Lynch. [19]
In November 2025, the board went a step further, electing Joyner as Chair of the Board effective January 1, 2026 – a sign of confidence in his turnaround efforts and nearly four decades of experience at the company. [20]
Under Joyner, CVS has:
- Stabilized the Aetna business and improved Medicare Advantage star ratings
- Tightened risk in health insurance and health‑care delivery, exiting weaker Accountable Care Organization arrangements
- Slowed clinic expansion in primary care while still betting on Oak Street’s model
- Pivoted capital toward technology and cost discipline rather than footprint growth [21]
Wall Street Forecasts and Analyst Commentary
Consensus rating: “Moderate Buy”
As of December 10, 2025, 26 sell‑side firms covering CVS give the stock a consensus “Moderate Buy” rating:
- 20 Buy
- 4 Hold
- 2 Strong Buy
The average 12‑month price target is about $91.70, implying mid‑teens upside from the current share price in the high‑$70s. [22]
MarketBeat also notes that institutional ownership is above 80%, and CVS continues to pay a $0.665 quarterly dividend ($2.66 annualized), for a yield around 3.4% at recent prices. [23]
Wave of target upgrades after Investor Day
After the December guidance update, a cluster of major banks raised their targets: [24]
- Goldman Sachs: target to $95 (Buy)
- Morgan Stanley: target to $93 (Overweight), citing turnaround momentum
- Barclays: target to $93 (Overweight)
- Mizuho: target to $95 (Outperform)
- Truist: target to $98 (Buy/Outperform)
- TD Cowen: target to $105 (Buy), arguing that Medicare Advantage recovery supports long‑term EPS growth
- Bank of America: reiterates Buy with a $100 target
- UBS: earlier lifted its target to $96 with a Buy rating
Across these notes, analysts generally view CVS as:
- A diversified healthcare platform with improved earnings visibility
- A beneficiary of Aetna margin recovery and strong Caremark contract wins
- Still somewhat discounted relative to its growth outlook and historical valuation
Meanwhile, MarketScreener and Seeking Alpha data show the mean target in the mid‑$90s and describe the new 2026 EPS guidance of $7.00–$7.20 as broadly in line with consensus, even as revenue guidance for 2026 (≥$400 billion) sits modestly below some sell‑side models. [25]
Technical view: leadership stock again?
Investor’s Business Daily recently upgraded CVS’s Relative Strength (RS) Rating to 81 (on a 1–99 scale), meaning its 12‑month price performance now beats over four‑fifths of all tracked stocks. [26]
The stock is described as forming a “flat base” with a potential buy point at $85.15, about 9% above current levels, with a suggestion that a breakout would ideally be accompanied by a spike in trading volume. IBD also highlights CVS’s 47% earnings growth and 8% sales growth in the latest quarter as confirming improving fundamentals. [27]
This technical backdrop matches the fundamental picture: a stock that was heavily sold off in 2024, then aggressively re‑rated as earnings and guidance improved.
How CVS Stock Looks on Valuation
Investors care less about guidance in isolation and more about what it implies for valuation.
Using CVS’s own 2026 adjusted EPS target of $7.00–$7.20 and a current share price around $78, the stock trades at roughly 11 times forward 2026 adjusted earnings—a low‑double‑digit multiple that sits below the S&P 500’s average P/E and below many large healthcare peers. [28]
On a GAAP basis, the picture is noisy because of the big impairment charge and narrow net margins: MarketBeat estimates CVS’s recent net margin at just 0.12%, pushing the trailing GAAP P/E above 200. [29]
That split between GAAP and adjusted numbers is exactly why investors are laser‑focused on:
- Whether the Oak Street / Signify restructuring truly resets the earnings base; and
- Whether the AI and engagement strategy produces enough incremental profit to justify the company’s mid‑teens EPS growth target through 2028. [30]
Key Bullish Drivers for CVS Health Stock
1. A diversified health platform with improving fundamentals
CVS operates across: insurance (Aetna), pharmacy benefit management (Caremark), retail and mail pharmacies, and health‑care delivery (clinics and home health). That breadth lets it capture value at multiple points in the health‑care chain and cross‑sell to roughly 185 million consumers it touches across its businesses. [31]
Q3 and Investor Day updates show:
- Revenue growing high‑single‑digits off an already massive base
- Health Care Benefits swinging strongly back to profitability
- PBM contracts and retention remaining strong
- Retail pharmacy still generating stable earnings and cash flow [32]
2. Turnaround momentum and guidance credibility
CVS has:
- Beaten earnings expectations four quarters in a row [33]
- Raised 2025 EPS guidance multiple times this year, from $6.30–$6.40 to $6.55–$6.65 in October, then to $6.60–$6.70 at Investor Day [34]
- Provided multi‑year EPS growth targets, which the CFO describes as designed to be “credible and clear” with room for upside [35]
For a stock that was deeply out of favor in 2024, consistency alone is a bullish catalyst.
3. AI, data, and engagement as margin levers
By integrating claims data, pharmacy data, clinical data, and engagement behaviors into one AI‑native platform, CVS aims to:
- Identify high‑risk patients earlier
- Push appropriate care settings (home vs clinic vs hospital)
- Improve adherence and preventive care
- Reduce unnecessary utilization
If this works, it could both lower medical cost ratios at Aetna and boost fee‑based revenue from partners who use the platform, supporting the company’s mid‑teens EPS growth ambition. [36]
Major Risks and What Could Go Wrong
No turnaround story is risk‑free. For CVS, key issues include:
1. Execution risk in Health Care Delivery
The $5.7 billion impairment and 16 Oak Street clinic closures are reminders that primary care and home‑health strategies are still evolving and can be capital‑intensive. If growth in these units remains below plan, the expected path to profitability in Health Care Delivery could slip, putting pressure on the multi‑year EPS targets. [37]
2. Medical cost and Medicare policy risk
CVS has significant exposure to Medicare Advantage and Medicare Part D, where utilization trends and the Inflation Reduction Act (IRA) can shift margins rapidly. The company itself notes that changes in Part D seasonality and higher acuity in individual exchange products are affecting results, even as government business drives revenue growth. [38]
Health insurers across the industry, including CVS peers, have repeatedly flagged elevated medical costs in government‑backed health plans; if costs spike again or reimbursement is cut further, earnings could be hit. [39]
3. Regulatory and PBM scrutiny
Pharmacy benefit managers face mounting scrutiny over pricing transparency, rebates, and perceived conflicts of interest. CVS is already moving toward more transparent pricing models in its PBM unit, but any regulatory overhaul could change profitability in ways that are hard to model today. [40]
4. Retail headwinds and competition
CVS’s physical pharmacies still depend on consumer traffic and front‑of‑store sales, which remain vulnerable to e‑commerce, changing shopping habits, and competitive pressure from Walgreens, Walmart, Amazon, and others. Earlier commentary on reduced store traffic and competition was one reason investors were skeptical before the 2025 rebound. [41]
Bottom Line: A Comeback Story With Real Momentum—and Real Complexity
As of December 10, 2025, CVS Health stock looks like a genuine comeback story:
- The share price has rebounded roughly three‑quarters this year after a steep 2024 decline. [42]
- Management has raised guidance repeatedly and now projects mid‑teens EPS growth through 2028. [43]
- Analysts broadly rate the stock a Buy/Overweight, with targets clustering in the low‑to‑mid $90s and some bulls north of $100. [44]
- On an adjusted basis, valuation remains in the low‑double‑digit forward P/E range, not demanding if CVS hits its numbers. [45]
At the same time, investors must weigh ongoing execution, policy, and regulatory risks in a highly complex business spanning insurance, pharmacies, PBM operations, and primary care.
For readers following CVS Health, the story today is less about survival and more about whether management can convert a reset into durable, compounding growth—and whether the current share price already discounts that future.
References
1. www.reuters.com, 2. companiesmarketcap.com, 3. www.cvshealth.com, 4. www.cvshealth.com, 5. www.barrons.com, 6. www.cvshealth.com, 7. www.cvshealth.com, 8. www.cvshealth.com, 9. investors.cvshealth.com, 10. investors.cvshealth.com, 11. www.reuters.com, 12. en.wikipedia.org, 13. www.beckershospitalreview.com, 14. www.beckershospitalreview.com, 15. www.reuters.com, 16. www.cvshealth.com, 17. www.cvshealth.com, 18. www.investopedia.com, 19. www.cvshealth.com, 20. www.prnewswire.com, 21. investors.cvshealth.com, 22. www.marketbeat.com, 23. www.marketbeat.com, 24. www.marketscreener.com, 25. seekingalpha.com, 26. www.investors.com, 27. www.investors.com, 28. www.cvshealth.com, 29. www.marketbeat.com, 30. www.cvshealth.com, 31. www.cvshealth.com, 32. investors.cvshealth.com, 33. www.reuters.com, 34. www.cvshealth.com, 35. www.cvshealth.com, 36. www.cvshealth.com, 37. investors.cvshealth.com, 38. investors.cvshealth.com, 39. www.reuters.com, 40. www.alpha-sense.com, 41. www.investopedia.com, 42. www.reuters.com, 43. www.cvshealth.com, 44. www.marketbeat.com, 45. www.cvshealth.com
