CVS Tops Quarterly Estimates, Reaffirms Profit Outlook as Turnaround Plan Takes Effect

Why It Matters

By confirming guidance, CVS signals resilience amid industry pricing pressure, reassuring investors and underscoring the effectiveness of its restructuring.

Key Takeaways

• Q4 EPS $1.09, beating $0.99 estimate.
• Revenue $105.69B, surpassing $103.59B forecast.
• Full‑year profit outlook $7‑$7.20 per share maintained.
• Aetna Medicare Advantage margins improving toward 3‑4% by 2028.
• $20B headwinds from ACA exit and federal drug‑price deals.

Pulse Analysis

The latest quarterly results illustrate how CVS Health’s aggressive turnaround, launched under CEO David Joyner in late 2024, is beginning to deliver measurable gains. By trimming underperforming locations, reshaping leadership, and leveraging the Rite Aid pharmacy network, the retailer has boosted prescription volume and consumer‑wellness sales, helping it exceed revenue expectations despite a challenging pricing environment. These operational improvements are complemented by a disciplined cost‑control agenda that has already lifted earnings per share above analyst forecasts.

Investors are paying close attention to CVS’s reaffirmed 2026 outlook, which projects earnings of $7‑$7.20 per share and at least $400 billion in revenue. Maintaining this guidance amid $20 billion of identified headwinds—chiefly the withdrawal from the Affordable Care Act individual exchange and the impact of new federal drug‑price agreements—demonstrates confidence in the company’s ability to absorb external shocks. The firm’s partnership with the Trump administration’s TrumpRx platform also signals a willingness to align with policy‑driven cost‑reduction initiatives, potentially creating a more favorable negotiating position for its Caremark pharmacy‑benefit manager.

Looking ahead, CVS’s growth trajectory will hinge on several strategic levers. The Aetna Medicare Advantage segment is targeting 3‑4% margins by 2028, while Caremark’s negotiating power could deepen as drug‑price baselines shift lower. Additionally, the integration of former Rite Aid locations expands geographic reach and customer acquisition opportunities. However, continued regulatory scrutiny, evolving Medicare reimbursement rules, and competitive pressure from other integrated health‑care players remain risks that could temper optimism. Overall, CVS’s latest performance suggests the turnaround is on track, positioning the company as a resilient player in a volatile health‑care market.

CVS tops quarterly estimates, reaffirms profit outlook as turnaround plan takes effect

By Annika Kim Constantino · Published Tue, Feb 10 2026 6:30 AM EST

• CVS Health reported fourth‑quarter earnings and revenue that beat estimates and reaffirmed the 2026 profit guidance that previously impressed investors.

• The results signal steady progress in the health‑care giant's aggressive turnaround plan under CEO David Joyner, who stepped into the role in late 2024.

• CVS sees full‑year profit coming in between $7 to $7.20 per share and maintained its 2026 revenue guidance of at least $400 billion.

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A pedestrian walks by a CVS store in Greenbrae, California, on July 31, 2025.

Justin Sullivan | Getty Images

CVS Health on Tuesday reported fourth‑quarter earnings and revenue that beat estimates and reaffirmed the 2026 profit guidance that impressed investors, signaling steady progress in the health‑care giant's turnaround plan.

“'24 was a tough year for the company. So '25 righted the ship,” CVS CFO Brian Newman said in an interview.

CVS, which operates one of the largest pharmacy chains in the U.S., sees full‑year profit coming in between $7 to $7.20 per share. That is in line with the $7.17 per share analysts were expecting, according to LSEG.

Newman also said the company is maintaining its 2026 revenue guidance of at least $400 billion. Analysts expect revenue of $409.77 billion, according to LSEG, though it’s unclear if those estimates account for all of the headwinds Newman cited.

He said that guidance includes $20 billion in headwinds, roughly half of which is driven by the company’s move to exit the Affordable Care Act individual exchange market this year. The other half reflects the company’s retail business adjusting to lower drug prices after the “most favored nation” deals that President Donald Trump struck with more than a dozen pharma companies in recent months.

CVS last week said its roughly 9,000 pharmacies are accepting discount cards from the president’s newly launched direct‑to‑consumer platform, TrumpRx, for eligible patients. Newman said CVS shares the Trump administration’s goal of reducing costs. He added that the lower prices set a new starting point from which Caremark, the company’s pharmacy benefit manager, can negotiate even lower costs for its clients, “so we don’t see these as kind of adversarial relationships.”

CVS previously said it expects growth this year to be driven by the return to target margins at its recovering Aetna insurance business, led by privately run Medicare Advantage plans, and Caremark.

Newman added that primary‑care provider Oak Street Health is “improving its profitability” this year. That comes after CVS moved to close 16 underperforming Oak Street locations. For the retail pharmacy business, Newman said the company has several tailwinds, such as new technological investments and the locations and new customers CVS acquired from Rite Aid last year after it filed for bankruptcy.

Investors rewarded CVS last year as CEO David Joyner, who stepped into the role in late 2024, pressed ahead with a sweeping restructuring aimed at reversing years of underperformance. The company has cut costs, reshuffled leadership and exited weaker markets, helping fuel a roughly 40 % stock rise over the past year.

Fourth‑quarter results vs. expectations (LSEG survey)

• Earnings per share: $1.09 adjusted vs. $0.99 expected

• Revenue: $105.69 billion vs. $103.59 billion expected

The company posted net income of $2.92 billion, or $2.30 per share, for the fourth quarter. That compares with net income of $1.62 billion, or $1.30 per share, for the same period a year ago.

Excluding certain items, such as restructuring charges and capital losses, adjusted earnings were $1.09 per share for the quarter.

CVS booked sales of $105.69 billion for the fourth quarter, up 8.2 % from the same period a year ago, as all three of its business segments showed growth.

Growth across business units

Insurance business – $36.29 billion in revenue, up more than 10 % from Q4 2024. Newman said the unit delivered a “very strong” quarter and that he expects another year of margin improvement, primarily driven by Medicare Advantage. The business for privately run Medicare plans is “continuing the path towards target margins” of 3 % to 4 % by 2028.

Aetna and other insurers have grappled with higher‑than‑expected medical costs over the past year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic. While medical costs remain high, Aetna and other insurers, such as UnitedHealthcare, appear to be becoming better equipped to navigate the issue moving forward.

Newman said, “We will continue the elevated trends… I don’t think it’s too early to assume anything other than a prudent outlook.”

The insurance segment’s medical benefit ratio—a measure of total medical expenses paid relative to premiums collected—remained consistent from the prior year, at 94.8 %. A lower ratio typically indicates that a company collected more in premiums than it paid out in benefits, resulting in higher profitability. Newman said the biggest driver of that ratio in the fourth quarter was Medicaid pass‑through payments that hit in late December.

In a release, CVS also said improved performance in the unit’s government business was offset by shifts in Medicare drug‑cost timing following changes under the Inflation Reduction Act, which altered the usual seasonal pattern of prescription spending. Last month, shares of Medicare Advantage insurers took a hit in January after the Trump administration proposed nearly flat government payment rates to those plans in 2027. Newman said he does not believe that the proposed rate reflects medical‑cost trends. CVS has started a dialogue with the Centers for Medicare and Medicaid Services before the agency finalizes the rate notice in early April.

Pharmacy and consumer wellness division – $37.66 billion in sales, up 12.4 % from the same period a year earlier. The increase came partly from higher prescription volume, including from the company’s acquisition of prescriptions from Rite Aid, but was offset by pharmacy reimbursement pressure and the impact of some generic drugs entering the market. The unit dispenses prescriptions in CVS’s more than 9,000 retail pharmacies and provides other services, such as vaccinations and diagnostic testing.

Health services segment – $51.24 billion in revenue, up 9 % compared with the same quarter in 2024. This unit includes Caremark, which negotiates drug discounts with manufacturers on behalf of insurance plans, creates formularies covered by insurance, and reimburses pharmacies for prescriptions.