A screen shows the CVS logo and trading information on the New York Stock Exchange, March 24, 2026.
Jeenah Moon | Reuters
CVS Health On Wednesday it beat first-quarter revenue and revenue estimates and raised its guidance for 2026, as its once-troubled insurance business showed improvement.
CVS, which operates the nation’s largest drugstore chain, sees full-year earnings of between $7.30 and $7.50 per share. That’s up from previous guidance of $7 to $7.20 per share.
The company also expects revenue of at least $405 billion by 2026, up from its previous forecast of at least $400 billion.
Most of that $5 billion increase “reflects the tailwind we’re seeing” at insurer Aetna, CVS CFO Brian Newman said in an interview with CNBC.
All parts of the healthcare giant’s business — the insurance, pharmacy and health services units — beat Wall Street expectations. But Aetna’s results are likely to matter to investors, who have watched higher medical costs hit major health insurers over the past two years.
The results showed continued progress in CVS’s broader turnaround plan, which included $2 billion in cost cuts, closing underperforming stores, shuffling leadership and cutting costs within privately run Medicare Advantage plans.
“From an investor lens, we said let’s put our targets in place that are reasonable, reasonable and find ways to do better. And we did that all at the end of last year and quarter,” Newman said. “So hitting and lifting, which I think is probably the fourth or fifth time in a row, feels like we’re doing that.”
“I am more confident in the year, but I take a cautious or prudent view,” he added, noting that the cost of treatment is still very high.
Shares of CVS rose more than 7% on Wednesday.
Here’s what CVS reported for the first quarter compared to Wall Street’s expectations, based on a survey of analysts by LSEG:
- Earnings per share: $2.57 adjusted vs. $2.20 expected
- Net worth: $100.43 billion versus $95.09 billion expected
The company posted revenue of $2.94 billion, or $2.30 per share, in the first quarter. That compares to revenue of $1.78 billion, or $1.41 per share, in the same period last year.
Excluding certain items, such as restructuring charges and capital losses, adjusted earnings were $2.57 per share for the quarter.
CVS booked sales of $100.43 billion in the first quarter, up 6.2% from the same period last year, as all three of its business segments showed growth.
The CVS report also added to a strong first quarter for the broader health insurance industry, although the second quarter will prove to be more important for those companies as they learn more clearly about medical costs.
The insurance unit is showing improvement
The insurance business brought in $35.97 billion in revenue during the quarter, up nearly 3% from the first quarter of 2025. That came in above the $33.28 billion that analysts were expecting, according to StreetAccount.
Newman attributes the quarter’s performance to Aetna’s underlying strengths, citing organizational changes in practices or technology that have enabled the company to “do things more efficiently.”
Aetna and other insurers faced higher-than-expected medical costs last year as more Medicare Advantage patients returned to hospitals for procedures they delayed during the violence. Medical costs remain high, but Aetna and other insurance companies seem better equipped to handle the trend, as many cut memberships and patient benefits and exit unprofitable markets.
The insurance segment’s medical benefit ratio – the ratio of total medical expenses paid to premiums collected – fell from a year earlier to 84.6% from 87.3%. A lower ratio usually indicates that the company collected more premiums than it paid out in benefits, resulting in higher profits.
Analysts expect an average of 86.3%, according to StreetAccount.
Newman said medical costs are not increasing, but CVS has internal plans to “take costs out of the way we do business.” He noted that the company can better predict medical cost trends, saying he’s glad “we don’t get a lot of surprises.”
But Newman said CVS now needs to focus on using the same tools to lower healthcare costs.
In the statement, CVS also said that the year-on-year improvement in this division is due to the lack of a so-called premium deficiency reserve, which was recorded at the same time in 2025. That refers to the liability the insurer may need to pay if future premiums are insufficient to cover expected claims and expenses.
CVS’s pharmacy and consumer health division posted $31.99 billion in first-quarter sales, flat compared to the year-ago period. Analysts were expecting sales of $31.70 billion, StreetAccount estimates.
That unit dispenses prescriptions to more than 9,000 CVS pharmacies and provides other services, such as vaccinations and diagnostic tests.
The company’s health services segment generated $48.24 billion in revenue for the quarter, up 11% from the same period last year.
That unit includes pharmacy benefits manager Caremark, which negotiates drug discounts with manufacturers on behalf of insurance plans, creates lists of drugs, or formularies, covered by insurance, and reimburses pharmacies for prescriptions.
