CVS Health (CVS, Financial) reported first-quarter revenue of $94.59 billion, exceeding analysts' expectations of $93.37 billion. The company also posted an adjusted earnings per share of $2.25, a substantial increase from $1.31 in the same quarter last year. This growth was driven primarily by the strong performance of its Health Care Benefits segment, which benefited from positive developments relative to the previous year and enhanced performance in Medicare, including improved Medicare Advantage star ratings for the 2025 payment year.
CVS Health emphasized its commitment to becoming America's most trusted healthcare provider by enhancing care, value, and service across its businesses. The company's focus on customer-centric initiatives has yielded positive outcomes across its Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments, all aimed at fostering better health outcomes for the 185 million consumers it serves.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 24 analysts, the average target price for CVS Health Corp (CVS, Financial) is $74.84 with a high estimate of $90.00 and a low estimate of $60.00. The average target implies an upside of 12.19% from the current price of $66.71. More detailed estimate data can be found on the CVS Health Corp (CVS) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, CVS Health Corp's (CVS, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CVS Health Corp (CVS, Financial) in one year is $87.79, suggesting a upside of 31.6% from the current price of $66.71. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CVS Health Corp (CVS) Summary page.
CVS Key Business Developments
Release Date: February 12, 2025
- Adjusted Earnings Per Share (EPS): $1.19 for Q4 2024.
- Adjusted Operating Income: $2.7 billion for Q4 2024.
- Revenue: Nearly $98 billion for Q4 2024, a 4% increase year-over-year.
- Full Year Cash Flow from Operations: Approximately $9.1 billion.
- Health Care Benefits Revenue: Approximately $33 billion, a 23% increase year-over-year.
- Medical Membership: Approximately 27.1 million, roughly flat sequentially.
- Medical Benefit Ratio: 94.8%, increased by 630 basis points year-over-year.
- Health Services Revenue: Approximately $47 billion, a 4% decrease year-over-year.
- Pharmacy & Consumer Wellness Revenue: Over $33 billion, a 7% increase year-over-year.
- Same-Store Pharmacy Sales: Increased 13% year-over-year.
- Same-Store Prescription Volumes: Increased nearly 6% year-over-year.
- Store Closure Plan: Completed three-year plan, maintaining over 27% retail pharmacy script share.
- 2025 Adjusted EPS Guidance: $5.75 to $6.00.
- 2025 Revenue Guidance for Health Services: Approximately $185 billion.
- 2025 Revenue Guidance for Pharmacy & Consumer Wellness: Approximately $134 billion.
- 2025 Cash Flow from Operations Guidance: Approximately $6.5 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CVS Health Corp (CVS, Financial) reported fourth-quarter adjusted earnings per share of $1.19 and adjusted operating income of $2.7 billion, indicating strong financial performance.
- The company provided initial full-year 2025 guidance for adjusted EPS in the range of $5.75 to $6.00, reflecting confidence in future growth.
- CVS Health Corp (CVS) has made significant progress in stabilizing its Aetna business, particularly in Medicare Advantage, which is expected to improve margins.
- The company has successfully implemented innovative pricing models like Caremark's TrueCost and CVS Pharmacy's CostVantage, enhancing transparency and affordability.
- CVS Health Corp (CVS) achieved a record volume year for Signify, completing over 3 million in-home health evaluations, contributing to revenue growth.
Negative Points
- The Health Care Benefits segment experienced an adjusted operating loss of $439 million, driven by a higher medical benefit ratio and other factors.
- CVS Health Corp (CVS) anticipates a decline in aggregate membership by over 1 million members, primarily in Individual Exchange and Medicare products.
- The company faces challenges with elevated medical cost trends, particularly in its Medicare Advantage and Individual Exchange businesses.
- CVS Health Corp (CVS) expects adjusted operating income for the Pharmacy & Consumer Wellness segment to decline approximately 5% in 2025.
- The company's leverage ratio remains above its long-term target, indicating ongoing financial pressure despite efforts to manage debt.
