CVS Health Raised Its Outlook, but the Stock Still Fell -- Barrons.com

By Catherine Dunn and Mackenzie Tatananni

CVS Health stock fell Wednesday, even after the healthcare giant raised its full-year guidance on the back of second-quarter earnings that handily beat analysts' projections.

Shares closed down 5.1% at $99.12 apiece, reversing course from premarket trading. While analysts reacted positively to the earnings announcement, company executives spoke in more detail on an investor call about sources of pressure during the quarter -- including from a federal drug pricing program called 340B.

"We did experience some pressure from 340B in the quarter and now expect that to be a headwind as we go into next year," Executive Vice President Prem Shah said on the call.

The "incremental angst" on the 2027 outlook is "the clear pressure point for the stock," said Leerink Partners analyst Michael Cherny in a client note Wednesday afternoon.

For the second quarter, CVS Health posted adjusted earnings of $2.58 a share. Analysts polled by FactSet were looking for $1.85 a share. Revenue rose more than 7% to $106.1 billion, outstripping Wall Street's call for $100.03 billion.

The insurer hiked its full-year outlook, guiding for revenue of at least $414 billion and adjusted earnings in the range of $7.90 to $8.10 a share. This compares to previous forecasts of at least $405 billion in revenue and earnings between $7.30 and $7.50 a share. Analysts were looking for revenue of $408.82 billion and profit of $7.45.

The company's health services segment, home to its pharmacy benefit manager, generated nearly half of total revenue after climbing 11.5% to $51.8 billion. Revenue in the health care benefits unit, which includes Aetna, rose 3.5% to $37.54 billion on strong growth in government programs. Meanwhile, pharmacy and consumer wellness revenue edged up 0.7% to $33.82 billion in the quarter.

"The theme you're going to hear from us is going to continue to be around the tremendous momentum we have across CVS Health," Chief Executive David Joyner said Wednesday morning on the investor call.

Also on Wednesday, CVS Health launched a partnership with Eli Lilly to access the drugmaker's GLP-1 medications, Zepbound and Foundayo. Patients will be able to use the CVS Health app to view pricing options by the fourth quarter, the company said, adding that the products may be available for same-day pickup at CVS pharmacies.

Like other health insurers, CVS Health stock has notched a strong run this year, bouncing back from cost woes in the Medicare Advantage program. Shares were already up nearly 32% in 2026, compared with the SP 500's 13% gain, as of Tuesday's close.

Leerink's Cherny said he still liked the "risk reward" at CVS, despite the element of uncertainty in the 2027 outlook. "All three segments beat our/consensus expectations, with strong flow-through embedded in the increased guidance," Cherny wrote. The firm reiterated its Outperform rating and $119 price target.

Corrections Amplifications: CVS stock went up 7.65% after first-quarter earnings. An earlier version of this article incorrectly said the gain was 6%.

Write to Catherine Dunn at catherine.dunn@dowjones.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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August 05, 2026 16:41 ET (20:41 GMT)