CVS Health reported fourth-quarter earnings and revenue that surpassed Wall Street expectations on Tuesday, appearing to navigate the rising medical costs that have recently destabilized the broader health insurance sector.
While citizens grapple with rising medical bills and soaring insurance premiums, this is another sign that the big beasts in the healthcare industry continue to enjoy something of a boom with CVS’s stock rising 40% in the past year.
While rivals like UnitedHealthcare have grappled with a surge in medical expenses as patients return to hospitals for delayed procedures, CVS signaled that its aggressive turnaround plan has left it better equipped to manage these industry-wide headwinds.
The healthcare giant posted adjusted earnings of $1.09 per share, beating the 99 cents expected by analysts surveyed by LSEG. Revenue rose 8.2% to $105.69 billion, also topping estimates of $103.59 billion. Following a volatile 2024, chief financial officer Brian Newman stated that the company successfully “righted the ship” in 2025.
The company’s insurance unit, Aetna, saw revenue climb more than 10% to $36.29 billion. Despite the “turmoil” in the insurance sector, Aetna’s medical benefit ratio remained consistent at 94.8%, indicating the company collected more in premiums relative to the benefits it paid out. Newman noted that while medical costs remain elevated across the industry, the company is maintaining a “prudent outlook” and continues to track toward its target margins of 3% to 4% for Medicare Advantage plans by 2028.
Under the leadership of CEO David Joyner, who took over in late 2024, CVS has implemented a sweeping restructuring plan that has included cost-cutting, leadership changes, and exiting underperforming markets.
CVS reaffirmed its full-year 2026 profit guidance of $7 to $7.20 per share, with revenue expected to reach at least $400 billion. This outlook remains steady despite $20 billion in anticipated headwinds, including the company’s exit from the Affordable Care Act individual exchange market and adjustments to lower drug prices following recent deals struck by the Trump administration.
Growth was reported across all three primary business segments:
Health Services (Caremark): Generated $51.24 billion in revenue, up 9%.
Pharmacy and Consumer Wellness: Posted $37.66 billion in sales, a 12.4% increase, bolstered by higher prescription volumes and the acquisition of customers from the bankrupted Rite Aid.
Health Insurance (Aetna): Delivered “very strong” performance despite high medical cost trends in Medicaid and Medicare.