The Trump administration has proposed a Medicare Advantage rate increase of just 0.09% for 2027, far below Wall Street expectations of 4%–6%. This minimal adjustment places pressure on CVS Health’s Aetna benefits segment, which accounts for more than one-third of the company’s revenue. With medical cost inflation squeezing already thin single-digit operating margins, investors may question whether the company can sustain growth in its core health plan business despite a 77% total return in 2025.

In the third quarter, BI Asset Management Fondsmaeglerselskab A S reduced its holdings in CVS Health by 30.1%, selling 166,058 shares to end the period with 386,062 shares valued at $27.5 million. Other notable moves included a 33.5% increase by Savant Capital LLC to 73,762 shares, and smaller increases by Unison Advisors (1.0%), J.W. Cole Advisors (7.5%), Envestnet Asset Management (2.6%) and Marco Investment Management (2.4%). Overall, institutional and hedge fund ownership stands at 80.66%. CVS paid a quarterly dividend of $0.665 per share on February 2, representing an annualized payout of $2.66 and a yield of 3.5%, although this results in a payout ratio of 700%.

Analysts remain broadly positive on CVS Health’s long-term prospects. JPMorgan Chase & Co. upgraded its rating to Overweight and raised its target from $93 to $101 per share, while Barclays moved to Overweight with a target of $93. UBS reaffirmed an Outperform rating, Morgan Stanley boosted its target from $89 to $93 and Cantor Fitzgerald reiterated an Overweight stance. Of 23 covering analysts, 19 rate the shares a Buy and four a Hold, producing a consensus price target of $94.82.