CVS Lifts Full-Year Profit Forecast on Aetna Strength and Strong Drug Sales

CVS Health Corp. on Wednesday significantly raised its full-year profit forecast after reporting second-quarter earnings and revenue that beat Wall Street expectations, driven by a more profitable mix of drugs and improved performance in its Aetna health insurance division.

Upgraded Forecast and Q2 Results

The company now projects its 2026 adjusted profit to be in the range of $7.90 to $8.10 per share, a substantial increase from its previous guidance of $7.30 to $7.50. This revised outlook is well above the analyst consensus of $7.45 per share, according to LSEG data.

The optimistic forecast follows a strong second quarter, marking the company's sixth consecutive quarterly beat of Wall Street estimates. Key results include:

• Adjusted EPS: $2.58, easily surpassing analysts' estimates of $1.85.
• Revenue: Rose to $106.1 billion from $98.9 billion a year earlier, ahead of expectations of $100.11 billion.

Aetna's Performance Drives Growth

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A key driver of the quarterly outperformance was the Aetna insurance business, which saw its medical loss ratio (MLR) improve to 87.4% from 89.9% a year ago. The MLR, which represents the percentage of premiums spent on medical care, indicates better-than-expected control over costs.

A CVS Health spokesperson attributed the progress to margin recovery efforts and bonus payments from the government for its highly-rated Medicare "Star ratings," which measure member outcomes and experience. The improved MLR helps restore investor confidence after the Aetna unit missed targets in 2024.

Business Strategy and Industry Context

The company's health services unit, which includes its pharmacy benefits manager and clinics, saw operating profits increase by 10% to $1.73 billion. CVS attributed this partly to operational changes at its Oak Street primary care business, where it is slowing expansion and closing 16 underperforming locations.

The results mirror a trend seen across the industry, with rival UnitedHealth also raising its forecast in July due to better cost management. While CVS said it remains cautious about elevated cost trends, it also announced that its MinuteClinic locations will begin offering $29 appointments for patients seeking consultations for popular weight-loss drugs like Wegovy and Zepbound.