CVS Health (CVS, Financial) has raised its 2025 performance outlook, exceeding Wall Street expectations, following better-than-expected first-quarter results driven by improved Medicare Advantage plans. The company reported that its Medicare Advantage plans received higher star ratings, boosting its performance.
CVS and other health insurers have faced rising costs from Medicare Advantage customers in recent quarters. However, CVS's results contrast with competitor UnitedHealth Group, which recently lowered its 2025 outlook due to increased medical service usage.
In the first quarter, CVS reported adjusted earnings per share of $2.25, with profits soaring 60% to $1.78 billion. Total revenue increased by 7% to $94.59 billion, surpassing analysts' expectations of $1.70 earnings per share and $93.66 billion in revenue.
For the full year, CVS now anticipates adjusted earnings per share between $6.00 and $6.20, up from its previous estimate of $5.75 to $6.00, and above analysts' expectations of $5.92.
Headquartered in Woonsocket, Rhode Island, CVS operates one of the largest U.S. pharmacy chains and a major pharmacy benefits management business. Through its Aetna division, it insures 27 million people. The company also announced plans to exit the Affordable Care Act individual insurance market next year.
Before market opening, CVS shares rose 10% to $73.55. After a challenging 2024, including multiple forecast downgrades and CEO Karen Lynch's resignation, CVS stock has risen over 48% in 2025.
