CVS Health hikes 2025 forecast again, boosted by insurance, pharmacy businesses

Key Points

• CVS Health exceeded Wall Street expectations for Q2 and increased its full-year earnings forecast for 2025 to between $6.30 and $6.40 per share, surpassing analyst predictions of $6.12.
• The company's revenue grew 8% to $98.9 billion, driven by a 4% increase in prescriptions filled at drugstores and a significant rise in health insurance income.
• Despite overall growth, CVS's adjusted operating income fell over 17% in its pharmacy benefit management segment due to client price cuts, while net income saw a 42% decline due to litigation charges.
• Following the positive earnings report, CVS Health's stock jumped nearly 5%, continuing a strong upward trend with a 39% increase year-to-date.

CVS Health topped Wall Street expectations for the second quarter and hiked its full-year forecast again, as the health care giant continued to rally under new management from a forgettable 2024.

The company said Thursday that it filled more prescriptions at its drugstores and an improving health insurance business fueled its quarterly performance.

CVS Health now expects adjusted 2025 earnings to range between $6.30 and $6.40 this year after previously hiking the forecast in May.

The new range is well above analyst predictions for $6.12 per share, according to the data firm FactSet.

CVS Health Corp., based in Woonsocket, Rhode Island, runs one of the nation’s largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for employers, insurers and other big clients. It also covers nearly 27 million people through its Aetna insurance arm.

The company saw revenue growth of 10% or more in all three business segments. But adjusted operating income dropped more than 17% in its biggest business, the pharmacy benefit management side, due partly to pharmacy client price cuts.

Income from the health insurance side jumped jumped more than 39% due to changes in risk adjustment estimates for individual insurance and improvements in its government business. That includes Medicaid and Medicare coverage.

The company also said there was some pressure from rising care use. Several health insurance companies reported disappointing second quarter earnings, in part due to care use spikes that turned out higher than anticipated when rates were set.

CVS Health also said it saw a 4% increase in prescriptions filled from its drugstores during the quarter.

Overall, the company reported adjusted earnings of $1.81 per share as revenue grew 8% to $98.9 billion.

Analysts had been looking for earnings of $1.46 per share on $94.51 billion.

Net income slid 42% to $1.02 billion, as the company booked $833 million in litigation charges.

Last year, CVS Health cut its forecast several times before former CEO Karen Lynch stepped down in the fall. David Joyner replaced her and added new executives to the company's leadership.

Company shares jumped nearly 5%, or $3.02, to $65.32 Thursday as broader indexes advanced slightly.

The stock had already advanced 39% so far this year, as of Wednesday’s close. The Standard & Poor’s 500 index has grown 8% over the same span.