CVS 2027 profit outlook overshadows strong quarter, shares fall

CVS also announced that its MinuteClinic, which provides walk-in and virtual care services, will offer $29 appointments for adults seeking weight-loss drug prescriptions for medicines including Novo Nordisk's Wegovy and Eli Lilly's Foundayo and Zepbound. CVS has consecutively beaten Wall Street estimates, helping its efforts to restore investor confidence, particularly in its Aetna insurance business, where it had missed targets for several quarters in 2024. The company forecast 2026 adjusted profit of $7.90 to $8.10 per share, up from its prior view of $7.30 to $7.50. Analysts expect full-year earnings per share of $7.45, according to LSEG data. The quarter was driven by a more profitable mix of drugs in its pharmacy business and bonus payments for its highly rated government health plans. In the Medicare program for adults aged 65 and older, the government rewards plans with high ratings, called Star ratings, with bonus payments. Aetna spent less on patients in the second quarter. Its medical loss ratio, or the percentage of premiums spent on medical care, was 87.4%, down from 89.9% a year ago and less than analysts' estimates of 90.03%. "We are seeing significant momentum in Aetna's margin recovery," Newman said. For the quarter, CVS, which also operates a large retail pharmacy chain and one of the biggest U.S. pharmacy benefits managers, reported an adjusted second-quarter profit of $2.58 per share, well above analysts' estimates of $1.85. CVS previously raised its outlook after beating first-quarter estimates and controlling medical costs earlier this year. The company has said medical costs in its Aetna health insurance business are above historical levels. The second-quarter results were broadly in line with rival UnitedHealth, which lifted its forecast in July on improved medical cost controls, raising the bar for health insurers this earnings season. Health insurers have faced persistently high costs for the last three years due to increased use of healthcare services across government-backed plans. They have been raising prices, cutting benefits and pulling less profitable plans from the market. While it has raised its outlook for the year, CVS said it remained cautious in light of continued elevated cost trends and the potential for a difficult macroeconomic environment. Operating profits increased 10% at its health services unit, which also includes clinics, to $1.73 billion, driven by changes to how the company operates its Oak Street primary care business. The company this year said it decided to slow expansion plans for Oak Street, which provides services to older adults, and plans to close 16 underperforming locations. CVS Health raised its 2026 profit forecast to reflect a better-than-expected second quarter, but provided a tepid 2027 outlook that appeared to underwhelm investors, and shares fell nearly 6%. CVS Chief Financial Officer Brian Newman, during a conference call with investors said, "While we would not normally comment on 2027 consensus this early in the year, an outlook of at least $8.44, consistent with current consensus, appears reasonable at this juncture." But analysts estimates for 2027 had not yet accounted for the large second-quarter beat announced on Wednesday that would typically lift their expectations going forward. CVS shares were down 5.8% at $98.38 after falling nearly 10% earlier.

CVS 2027 profit outlook overshadows strong quarter, shares fall

MinuteClinic to offer GLP-1 appointments

Health services profit rises as Oak Street changes continue

Shares fall after cautious 2027 outlook despite quarterly beat

2026 outlook raised as Aetna margins recover

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