By Amina Niasse and Sriparna Roy
Feb 10 (Reuters) – CVS Health on Tuesday maintained the 2026 earnings and revenue forecast it issued in December while suggesting it could surpass those goals, signaling progress in the healthcare conglomerate’s turnaround plan.
The company reported a decline in fourth-quarter profit but beat Wall Street expectations, helped by strength in its pharmacy benefit unit and prescription volume at its retail pharmacies.
“I talk about a Say-Do ratio,” said Chief Financial Officer Brian Newman. “Where we put out realistic targets and we try to deliver or exceed on expectations.”
Newman said the pharmacy chain’s profit had been declining annually about 5% for the past five years, but grew 5% in 2025, helped by its purchase of some assets of Rite Aid, which filed for bankruptcy.
CVS, which operates one of the largest U.S. pharmacy chains, Aetna insurance and the CVS Caremark pharmacy benefit manager, cut costs and restructured in 2025 after it underperformed in 2024 and replaced its management.
The company kept in place its 2026 adjusted profit forecast of $7.00 to $7.20 per share and revenue projection of at least $400 billion.
“While medical cost trends remain elevated, our experience in 2025 is supportive of our trend assumptions underlying our guidance,” said Newman in a call with analysts.
Analysts expect the company to earn $7.17 per share on revenue of $409.8 billion in 2026, according to LSEG data.
“The reiterated EPS guidance may be a bit of a letdown versus where investor expectations were, but we also aren’t surprised to see a level of prudence given the magnitude of moving pieces across the markets,” said Leerink analyst Michael Cherny.
CVS shares were up slightly in early trading.
CVS posted an adjusted fourth-quarter profit of $1.09 per share, down from $1.19 a year ago, but above analysts’ average estimate of 99 cents.
REVENUE RISES ON PRESCRIPTIONS
Total revenue rose to $105.7 billion for the quarter from $97.7 billion, driven in part by the Rite Aid deal. Prescriptions filled increased 6.3% from the year-ago quarter.
Revenue in the Health Services segment, which includes the pharmacy benefit management unit, rose to $51.2 billion in the fourth quarter from $47 billion a year earlier.
CVS’s Aetna insurance business reported a medical loss ratio, or the percentage of premiums spent on medical services, of 94.8%, slightly better than analysts’ estimate of 95.5%.
The company said medical cost trends in the quarter, while high, were broadly in line with its expectations.
The CFO said regulations introduced by the Biden administration’s Inflation Reduction Act caused medical costs in its Medicare Advantage business to rise more sharply in the latter part of the year.
Insurers focused on Medicare, the U.S. government program for older adults and people with disabilities, have been pressured by increased demand for medical services and changes in government reimbursement that have hurt revenue.
Last month, the Trump administration proposed a much smaller-than-expected increase to 2027 Medicare Advantage payment rates, which drove down shares of CVS, UnitedHealth and Humana.
CVS announced in 2025 it would stop offering plans established by the Affordable Care Act, commonly referred to as Obamacare, saying the business was unsustainable.
(Reporting by Amina Niasse in New York and Christy Santhosh, Sriparna Roy in Bengaluru; Editing by Caroline Humer, Pooja Desai and Bill Berkrot)
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