CVS Health\u00a0CVS is scheduled to report third-quarter 2025 results on Oct. 29, before the market opens.<\/p>\n
The Zacks Consensus Estimate for third-quarter earnings per share (EPS) suggests a 24.8% increase year over year to $1.36. The estimate has dropped 1.4% in the past 60 days. The Zacks Consensus Estimate for third-quarter revenues currently stands at $98.31 billion, suggesting a 3% increase year over year.<\/p>\n
The diversified healthcare company has a solid earnings surprise history. Its bottom-line surpassed estimates in each of the trailing four quarters, the average beat being 22.57%.<\/p>\n
Q3 Earnings Whispers for CVS<\/p>\n
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is the case here.<\/p>\n
Earnings ESP: CVS Health has an Earnings ESP of +0.28%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.<\/p>\n
Zacks Rank:\u00a0The company currently carries a Zacks Rank #2. You can see\u00a0the complete list of today\u2019s Zacks Rank #1 stocks here.<\/p>\n
Trends Influencing CVS Health\u2019s Q3 Performance<\/p>\n
We expect the company\u2019s strong execution to have supported solid results across all segments in the third quarter of 2025. In Health Care Benefits, revenue growth was likely driven by the Government business, backed by the favorable impact of the Inflation Reduction Act on the Medicare Part D program. CVS is also expected to have made progress in driving operational improvements within Aetna. Besides, the profitability metrics may have benefited from stronger underlying Government business performance and favorable year-over-year impact from changes to the risk adjustment estimates in the individual exchange business. The Zacks Consensus Estimate for the Health Care Benefits segment’s revenues indicates a 5.5% year-over-year increase.<\/p>\n
Meanwhile, continued pharmacy client price improvements are expected to have pressured CVS\u2019 Health Services segment results. Despite this, revenues may have benefited from pharmacy drug mix and brand inflation. In the health care delivery business, second-quarter results were affected by a higher medical benefit ratio at Oak Street Health. The company\u2019s efforts to improve Oak Street\u2019s financial performance via investments in technology, leadership enhancements and payer-client partnerships may have positively reflected in the third-quarter 2025 performance.<\/p>\n
Signify Health likely saw another quarter of increased in-home assessment volumes. In addition, improved purchasing economics are expected to positively impact the segment\u2019s profitability. The Zacks Consensus Estimate for the Health Services segment revenues indicates a 3.4% increase year over year.<\/p>\n
CVS\u2019 Pharmacy & Consumer Wellness unit likely sustained strong momentum in the third quarter of 2025, despite ongoing pharmacy reimbursement pressures. Growth in pharmacy same-store sales is expected to have been driven by the pharmacy drug mix, including branded GLP-1 drugs, and higher pharmacy same-store prescription volume on a 30-day equivalent basis. The segment may also have gained from additional volumes through the acquisition of prescription files from certain Rite Aid pharmacies.<\/p>\n
Going by the Zacks Consensus Estimate, revenues in the Pharmacy & Consumer Wellness segment are expected to increase 9.3% in the third quarter of 2025.<\/p>\n
CVS Stock Price Performance & Valuation<\/p>\n
Year to date, CVS shares have surged 79.9%, significantly outpacing the industry\u2019s flat growth and the Zacks Medical\u00a0sector\u2019s 0.2% rise. The company also performed better than its peers, UnitedHealth Group UNH and Elevance Health ELV, during this period.<\/p>\n
CVS YTD Price Comparison<\/p>\n
Valuation-wise, CVS is trading at a forward 12-month Price\/Sales (P\/S) of 0.25X, lower than the industry average of 0.40X. The stock is graded a Value\u00a0Score of A at present. Meanwhile, UnitedHealth Group and Elevance Health currently have a P\/E of 0.71X and 0.38X, respectively.<\/p>\n
CVS Health\u2019s One-Year P\/S<\/p>\n
CVS Health: Investment Consideration<\/p>\n
Through the strength of its diverse and scaled businesses, CVS is tackling some of the biggest healthcare challenges: affordability, access and inconsistent care coordination. The company continues to make steady progress on its margin recovery plan at Aetna through organisational realignment, strengthening talent and tech-driven enhancements that enhance service and reduce friction for members and healthcare professionals.<\/p>\n
Caremark, CVS\u2019 pharmacy benefit manager (PBM), continues to play a crucial role in making prescriptions and pharmacy costs more affordable and lowering costs by increasing competition. Caremark took a formulary action on July 1, preferring Novo Nordisk\u2019s weight loss medication, Wegovy, on its largest commercial template, to increase access to the GLP-1 drug at reduced prices. Earlier, CVS capitalised on the significant biosimilar opportunity with Cordavis, launching a low Humira biosimilar that now holds the largest U.S. market share.<\/p>\n
Amid ongoing footprint optimisation efforts, the company continues to maintain a pharmacy script share position of over 27%. The full transition of commercial scripts to the CVS CostVantage pharmacy reimbursement model this year marked a milestone, allowing payors to receive value more transparently. The company is now preparing to shift its government business to cost-based pricing models for 2026.<\/p>\n
To make health care experience more consumer-directed, CVS Health has committed $20 billion over the next decade to emerging technologies, including developing an open platform to streamline access across payers, providers, PBMs, pharmacies, and digital health tools. Following a strong second-quarter performance, the company raised its full-year 2025 guidance, now projecting adjusted EPS of $6.30 to $6.40 and total revenues of at least $391.5 billion.<\/p>\n
End Note: Buy CVS Stock<\/p>\n
All three segments are expected to have positively contributed to CVS Health\u2019s performance in the third quarter of 2025, with the ongoing recovery at Aetna being a major highlight. The company appears well-positioned to continue its streak of earnings surprises. Its extensive reach, highly differentiated solutions, and ongoing innovation support its ability to address healthcare challenges. Combined with strong YTD performance and attractive valuation, the stock remains a compelling option for investors.<\/p>\n
This article originally published on Zacks Investment Research (zacks.com).<\/p>\n
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