CVS Health Corporation provides health solutions in the United States. It operates through Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments. The Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. The Health Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, specialty and mail order pharmacy, clinical, disease management, and medical spend management services. It serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, CMS, plans offered on public health insurance, and other sponsors of health benefit plans. The Pharmacy & Consumer Wellness segment sells prescription and over-the-counter drugs, consumer health and beauty products, and personal care products. This segment also distributes prescription drugs; and provides related pharmacy consulting and other ancillary services to care facilities and other care settings. It operates online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was incorporated in 1996 and is headquartered in Woonsocket, Rhode Island.

CVS looks like a large and profitable business with very low multiples on revenue and free cash flow, but the quality of capital returns is still noticeably weaker than the industry average. P/S of 0.26 and P/FCF of 9.36 point to clear cheapness relative to the sector, and P/B of 1.37 also does not look expensive, but P/E of 22.61 is already slightly above the industry median, which limits the potential for re-rating. At the same time, returns on equity and assets remain weak: ROE of 6.39, ROA of 1.15, and ROI of 3.58 are well below industry benchmarks, while net margin of 1.18 and operating margin of 1.46 show a very thin cushion. Margin and earnings trends in recent periods have rather stabilized than clearly accelerated, which is good for resilience but not enough for an aggressive valuation increase. Revenue remains at a very high level and looks stable, while gross profit and EBITDA support the scale of the business, which is a positive for valuation. On the other hand, liquidity is weak: a current ratio of 0.87 and quick ratio of 0.66 are below comfortable levels, so the balance sheet remains dependent on stable cash flow. The debt burden is also higher than desired: debt/equity of 0.78 and significant debt relative to the industry median add risk, although equity and net business value remain large. Dividend yield has declined from previous levels and currently does not look like a strong driver of re-rating. Overall, the fundamentals support the idea of an inexpensive company with large scale and acceptable profitability, but weak capital efficiency, low margins, and elevated balance-sheet risks do not allow for an aggressive increase in the target valuation. For an investor, this is more a story of moderate undervaluation with limited upside than a candidate for a strong upward revision.

CVS Health Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Сильный индекс, без изменений. Отток средств из лонгов на высоком уровне.

Strong index, flat. Outflow of funds from longs at a high level.

CVS looks inexpensive on P/S and P/FCF, but weak ROE/ROA, low margins, and elevated leverage limit its re-rating potential.

The S&P 500 Index ($SPX) (SPY) closed down by -1.11% on Wednesday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down by -0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -2.02%. December E-mini S&P futures (ESZ26) fell -1.16%, and December E-mini Nasdaq futures (NQZ26) fell -2.10%.
Stock indexes sold off sharply on Wednesday, with the S&P 500 falling to a 1.5-week low and the Nasdaq 100 dropping to a 3.5-week low. Inflation woes dampened market sentiment and sparked stock liquidation on Wednesday after US September consumer prices rose more than expected, reinforcing speculation that the Fed will keep interest rates higher for longer amid sticky price pressures. The chance of a 25 bp Fed rate hike at this month’s FOMC meeting rose to 37% from 22% before the CPI report. Also, the rout in chipmakers continued Wednesday, weighing on the overall market.
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Wednesday’s broader market slump sparked defensive buying of health care and pharmaceutical stocks, limiting losses in the Dow Jones industrials.
US Sep CPI rose +3.7% y/y, stronger than expectations of +3.6% y/y. Sep core CPI rose +2.6% y/y, stronger than expectations of 2.5% y/y.
The Fed Beige Book was hawkish, noting that a majority of the twelve Fed districts in the six weeks through October 5 reported economic growth, and half saw robust or intensifying price pressures.
Stocks and bonds garnered some support Wednesday on comments from Fed Vice Chair Michelle Bowman, who signaled she favors keeping Fed policy steady at this month's FOMC meeting when she said, "We have some time to wait and see how financial conditions and the economy evolve before we decide that we need to take any more action" on interest rates.
US MBA mortgage applications fell -2.7% in the week ended October 9, with the purchase mortgage sub-index down -4.0% and the refinancing mortgage sub-index down -0.4%. The average 30-year fixed-rate mortgage rose +1 bp to a 2.75-year high of 7.50% from 7.49% the prior week.
China's trade news was better than expected, supporting global growth prospects. China's Sep exports rose +36.3% y/y, stronger than expectations of +25.7% y/y and the most in 7 months. Sep imports rose +31.0% y/y, stronger than expectations of +25.0% y/y.
Stocks have support from the prospect of solid quarterly earnings results starting this week. Goldman Sachs on Monday raised its three-month view on global equity markets to overweight from neutral, saying. “Earnings growth remains supportive for equities and the recent valuation de-rating has improved asymmetry into the third-quarter earnings season.” According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%.
Nov WTI crude oil prices (CLX26) closed up more than +1% on Wednesday as Yemen's Houthi rebels launched multiple drone and missile attacks across Saudi Arabia, including energy infrastructure. Also, Iranian attacks on shipping attempting to transit the Strait of Hormuz have increased in recent weeks, threatening a rebound in energy supplies from the Middle East.
Markets are discounting a 37% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled mixed on Wednesday. The Euro Stoxx 50 closed up +0.38%. China's Shanghai Composite closed down -0.89%. Japan's Nikkei-225 Stock Average closed down -0.05%.
Interest Rates
December 10-year T-notes (ZNZ6) closed up by +4.5 ticks on Wednesday. The 10-year T-note yield fell -2.5 bp to 5.183%. T-note prices recovered from early losses on Wednesday and settled higher as a slump in equity markets fueled short-covering in T-notes. Also, dovish comments on Wednesday from Fed Vice Chair Bowman were bullish for T-notes when said she sees no urgent need for the Fed to raise interest rates.
T-notes initially retreated on Wednesday on the stronger-than-expected US Sep CPI report, which boosted the chance of a Fed rate hike later this month to 37% from 22% before the report. Also, Wednesday’s +1% increase in WTI crude oil has raised inflation expectations and is bearish for T-notes. In addition, the Fed Beige Book was negative for T-notes, noting intensifying price pressures in more than half of the Fed’s districts.
European government bond yields moved lower on Wednesday. The 10-year German bund yield fell -0.3 bp to 3.466%. The 10-year UK gilt yield fell -2.3 bp to 5.424%.
The German Sep wholesale price index rose +8.7% y/y from +6.8% y/y in Aug, the strongest pace of increase in nearly 3.5 years.
Markets are discounting a 12% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks sold off Wednesday, weighing on the overall market. The iShares Semiconductor ETF (SOXX) fell to a 3.5-week low and closed down more than -4%. CoreWeave closed down more than -15% to lead losers in the Nasdaq 100, and Lumentum Holdings (LITE) closed down more than -8%. Also, Marvell Technology (MRVL) closed down more than -7%, and ARM Holdings Plc (ARM) closed down more than -6%. In addition, Advanced Micro Devices (AMD) and SanDisk (SNDK) closed down more than -5%, and Lam Research (LRCX), Seagate Technology Holdings Plc (STX), Microchip Technology (MCHP), Intel (INTC), and Western Digital (WDC) closed down more than -4%.
The Magnificent Seven technology stocks fell on Wednesday, weighing on the broader market. Nvidia (NVDA) and Meta Platforms (META) closed down more than -3%, and Tesla (TSLA) closed down more than -2%. Also, Alphabet (GOOGL), Amazon.com (AMZN), and Microsoft (MSFT) closed down more than -1%. Bucking the trend, Apple (AAPL) closed up +0.50%.
Cybersecurity stocks weakened on Wednesday, weighing on the overall market. Cloudflare (NET) and Okta (OKTA) closed down more than -6%, and Palo Alto Networks (PANW) closed down more than -5%. Also, Crowdstrike Holdings (CRWD) and SentinelOne (S) closed down more than -4%, and Fortinet (FTNT) and Zscaler (ZS) closed down more than -3%.
Cryptocurrency-exposed stocks fell on Wednesday after Bitcoin (^BTCUSD) fell more than -1%. Iren Ltd (IREN) closed down more than -12%, and MARA Holdings (MARA) and Riot Platforms (RIOT) closed down more than -9%. Also, Galaxy Digital Holdings (GLXY) and Robinhood Markets (HOOD) closed down more than -8%, and Circle Internet Group (CRCL), BitMine Immersion Technologies (BMNR), and Strategy (MSTR) closed down more than -5%. On addition, Coinbase Global (COIN) and Bullish (BLSH) closed down more than -4%.
Health insurance stocks moved higher on Wednesday as a defensive play amid the broader market rout. UnitedHealth Group (UNH) closed up more than +4% to lead gainers in the S&P 500 and Dow Jones Industrials. Also, CVS Health Corp (CVS), Cardinal Health (CAH), and United Health Services (UHS) closed up more than +3%, and HCA Healthcare (HCA) and the Cigna Group (CI) closed up more than +2%. In addition, Centene (CNC) and Humana (HUM) closed up more than +1%.
Defensive pharmaceutical stocks rallied on Wednesday amid the broader market slump. Amgen (AMGN), Eli Lilly (LLY), Gilead Sciences (GILD), Merck & Co (MRK), Pfizer (PFE), and Regeneron Pharmaceuticals (REGN) closed up more than +3%, and Vertex Pharmaceuticals (VRTX) closed up more than +2%.
Dell Technologies (DELL) closed down more than -11% to lead losers in the S&P 500 , Hewlett Packard Enterprise (HPE) closed down more than -8%, and NetApp (NTAP) closed down more than -6% after Barclays downgraded the stocks to equal weight from overweight.
Bank of America (BAC) closed down more than -4% after reporting Q3 equities trading revenue ex-DVA of $2.51 billion, weaker than the consensus of $2.63 billion.
State Street (STT) closed down more than -3% after reporting Q3 revenue of $4.00 billion, weaker than the consensus of $4.04 billion.
Progressive (PGR) closed down more than -3% after reporting Q3 net premiums written of $22.30 billion, below the consensus of $22.50 billion.
Liquidia (LQDA) closed up more than +27% after reaching a global settlement resolving all pending litigation with United Therapeutics.
Earnings Reports (10/15/2026)
Alcoa Corp (AA), Bank of New York Mellon Corp/The (BNY), Charles Schwab Corp/The (SCHW), First Horizon Corp (FHN), Interactive Brokers Group Inc (IBKR), JB Hunt Transport Services Inc (JBHT), Marsh & McLennan Cos Inc (MRSH), PNC Financial Services Group Inc (PNC), Prologis Inc (PLD), US Bancorp (USB).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Stocks Sharply Lower on Inflation Woes and Slumping Chipmakers

(RTTNews) - CVS Pharmacy Inc. and its related corporate entities under CVS Health Corp. (CVS) have agreed to pay $315 million to settle federal allegations of unlawfully dispensing opioids and other controlled substances and submitting false claims to federal healthcare programs, said the U.S. Department of Justice (DOJ) on Tuesday.
The settlement concerns alleged violations of the Controlled Substances Act and the False Claims Act between October 17, 2013, and December 2, 2025. The government claimed that CVS pharmacies filled prescriptions for excessive quantities of opioids, prescriptions filled too early and filled prescriptions that lacked a legitimate medical purpose.
Federal authorities further asserted that the company abused combinations of opioids, benzodiazepines, and muscle relaxants known as "trinity" prescriptions, despite warning signs that the prescriptions might be unlawful.
The pharmacies were also accused of filling prescriptions issued by "pill mill" prescribers who allegedly wrote large numbers of controlled-substance prescriptions without a medical purpose.
The complaint further alleged CVS policies on staffing, performance metrics, and incentive compensation contributed to improper dispensing and that pharmacists faced constraints in identifying and addressing problematic prescriptions.
Many of the disputed prescriptions were subsequently billed to and reimbursed by Medicare and other federal healthcare programs, claimed the United States.
In addition to the monetary settlement, CVS entered into an agreement with the Drug Enforcement Administration (DEA) to strengthen safeguards for dispensing controlled substances. The measures include establishing a hotline for employees and the public to report suspected unlawful dispensing, proactively monitoring prescription patterns and evaluating prescribers suspected of illegal prescribing.
The settlement also resolves a civil whistleblower lawsuit filed by a former CVS employee, Hillary Estright under the False Claims Act. The DOJ emphasized that the claims resolved by the settlement are allegations and that there has been no determination of liability.
CVS closed at $87.55, down 0.22%.
In the overnight trading, shares rose 0.27% to $87.79.

CVS Agrees To Pay $315 Mln To Resolve Opioid Prescription Allegations

In the latest trading session, CVS Health (CVS) closed at $87.85, marking a -1.44% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.77%. Meanwhile, the Dow lost 0.67%, and the Nasdaq, a tech-heavy index, lost 0.92%.
The drugstore chain and pharmacy benefits manager's stock has dropped by 4.22% in the past month, falling short of the Medical sector's loss of 3.65% and the S&P 500's gain of 0.96%.
Analysts and investors alike will be keeping a close eye on the performance of CVS Health in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.62, signifying a 1.25% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $105.04 billion, reflecting a 2.11% rise from the equivalent quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.02 per share and a revenue of $418.17 billion, signifying shifts of +18.81% and +4.01%, respectively, from the last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for CVS Health. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, CVS Health holds a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that CVS Health has a Forward P/E ratio of 11.11 right now. This represents a discount compared to its industry average Forward P/E of 17.04.
We can also see that CVS currently has a PEG ratio of 0.87. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Medical Services industry had an average PEG ratio of 1.61.
The Medical Services industry is part of the Medical sector. This group has a Zacks Industry Rank of 96, putting it in the top 40% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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CVS Health (CVS) Falls More Steeply Than Broader Market: What Investors Need to Know

Key Points
Very few dividend stocks can now compete with bonds’ income potential, even including super-safe government bonds.
One stock in particular, however, can top higher Treasury yields without posing significantly more risk.
While this ticker boasts a better income profile, unlike most other stocks, there’s no guarantee of major capital appreciation. Given its yield though, you may not care.
For the first time in a long time, Treasury bonds are a compelling alternative to dividend stocks.
The yield on 10-year Treasuries now stands at a 19-year high of right around 5%, in fact, versus the S&P 500's (SNPINDEX: ^GSPC) average dividend yield of just over 1%. Indeed, only about 25 of the index's stocks offer better yields than 10-year Treasuries do at this time, and some of those names aren't exactly on a firm footing.
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There's one of these higher-yielding S&P 500 names, however, that I'd recommend more than any other dividend stock right now. That stock is Realty Income (NYSE: O), which currently boasts a forward-looking yield of 5.8%.
What's Realty Income?
You may be more familiar with this unfamiliar name than you realize. It doesn't do any consumer-facing business. Rather, it supports a bunch of consumer-facing companies you're sure to know.
Specifically, Realty Income is a landlord to a bunch of brick-and-mortar retailers including Walmart, CVS, Family Dollar, and Dollar General just to name few. Although the retailing industry may be struggling to compete with online-shopping alternatives, Realty Income's consistent occupancy rate of nearly 99% (of its 15,500 individual properties) indicates its tenants are the business's most resilient names.
It's ideally built to serve as a dividend-paying stock too.
See, Realty Income is structured as a real estate investment trust, or REIT. That just means as long as the majority of its rent-driven profits are passed along to shareholders in the form of dividend payments, they're not first taxed at the corporate level only to have it taxed again when investors receive that income.
And this REIT's dividend pedigree proves the company's resilience. Not only has Realty Income paid a dividend like clockwork since being founded in 1969, but has raised its annualized per-share dividend payment every year for the past 31 years.
The kicker: Unlike most dividend stocks, rather than a quarterly dividend, Realty Income's dividends are paid on a monthly basis, more closely aligning with how consumers incur their bills (if you're looking for income stocks to help cover your recurring costs of living).
More pro than con
That's the bull case anyway, although there is one arguable downside to consider before diving in. That is, although Realty Income shares trade just like any other stock and are therefore capable of producing capital appreciation, they don't always do so. Being dependent on borrowing to fund the purchase of properties that facilitate expansion, this ticker is highly sensitive to high and/or rising interest rates. That's a big part of the reason this stock's made little net progress since early 2020, when the COVID-19 pandemic was in full swing.
Nevertheless, with such a strong starting yield and reliable dividend growth that isn't apt to stop anytime soon, Realty Income is still one of the only longer-term income holdings I'd be interested in buying at this time even though I could lock in a respectable interest rate of 5% for a 10-year stretch with bonds backed by the U.S. government itself.
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Only a Handful of S&P 500 Stocks Can Match 10-Year Treasuries at 5%. Here's My Top Pick to Buy Now.

The global healthcare services market has expanded steadily in recent years. The market size is expected to reach $11.32 trillion by 2030, at a compound annual growth rate (CAGR) of 4.9% (per The Business Research). Over the coming years, market expansion is likely to be supported by greater adoption of digital health services, increased integration of AI into clinical workflows, rising demand for home-based care, broader population health management and higher investments in healthcare infrastructure.
Key trends include the growing adoption of telehealth and virtual care, increased use of data-driven clinical decision support, greater emphasis on preventive and value-based care, expansion of integrated care delivery models and a stronger focus on patient-centric service design.
CVS Health CVS and Cardinal Health CAH, two prominent players in this space, are positioned to capitalize on the market’s growth prospects.
Over the past year, shares of CVS have risen 16.6% while those of CAH have gained 53.1%.
The Case for CVS Health
CVS Health’s Health Services business continues to benefit from favorable pharmacy drug mix, brand inflation, purchasing economics and gradual improvement in Health Care Delivery. In the second quarter of 2026, the segment’s revenues increased 11.5% year over year to $51.80 billion, while adjusted operating income rose 10% to $1.73 billion. The company reiterated its full-year 2026 adjusted operating income outlook despite updating its view of the 340B program, supported by performance across the broader Pharmacy Services business.
Caremark continues to adapt its offerings as clients seek lower net costs and greater transparency. The 2026 selling season generated more than $6 billion in new sales, well above the company’s historical average. CVS Specialty also maintained adherence levels above 90%, while Caremark’s Humira biosimilar strategy has delivered more than $1.8 billion in client savings.
Health Care Delivery is also contributing to growth, with second-quarter 2026 revenues rising nearly 23% year over year, primarily driven by Oak Street Health. CVS is making technology infrastructure changes, refining payer contracts and adopting a more selective clinic footprint to improve the economics of Health Care Delivery over time.
However, the company remains exposed to reimbursement pressure across its government, retail pharmacy and PBM businesses, which could weigh on profitability. It also continues to factor potential macroeconomic headwinds into its 2026 outlook, as inflation, tariffs, interest rates, unemployment and supply-chain disruptions could increase costs, affect consumer behavior and pressure cash flow.
Valuation: CVS vs. CAH
CVS currently trades at a forward one-year price-to-sales (P/S) of 0.26X, slightly higher than its median. Cardinal Health’s 0.19X P/S also sits above its median. Additionally, CVS trades at a higher valuation than Cardinal Health.
The Case for Cardinal Health
Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical and Specialty Solutions, Global Medical Products and Distribution (“GMPD”). The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, laboratory and healthcare logistics offerings.
Its Pharmaceutical and Specialty Solutions business continues to benefit from strong branded and specialty drug volumes, related services and positive generics performance. In fiscal 2026, the segment’s revenues increased 15% year over year to $234.8 billion, while segment profit rose 23% to $2.8 billion. The company continues to execute its GMPD improvement plan, focusing on product mix, simplification, automation and cost optimization. BioPharma Solutions is also expanding its cell and gene therapy commercialization agreements, while the Specialty Alliance continues to broaden its multi-specialty services.
At-Home Solutions is benefiting from investments in distribution capacity and automation, while synergies from the Advanced Diabetes Supply integration are progressing ahead of schedule. Nuclear and Precision Health Solutions continues to expand in PET and theranostics, with fourth-quarter PET revenue growth above 20% and theranostics growth near 30%.
However, the company still depends on large distribution relationships, making contract renewals and customer mix important to revenue scale and pricing. The fiscal 2025 OptumRx expiration demonstrated how a major contract change can alter reported growth and distribution volumes. Additionally, GMPD remains exposed to tariffs, fuel and commodity costs, and geopolitical disruption across its global sourcing network.
Short-Term Price Target Favors CVS Over CAH
Based on short-term price targets offered by 23 analysts, the average price target for CVS comes to $115.09. The average price target represents an increase of 29.55% from the last closing price.
Image Source: Zacks Investment Research
Based on short-term price targets offered by 16 analysts, the average price target for Cardinal Health comes to $272.75. The average price target represents an increase of 21.02% from the last closing price.
Image Source: Zacks Investment Research
Our Take
Both CVS Health and Cardinal Health remain positioned to benefit from the continued expansion of the global healthcare services market. Both companies are investing in their respective growth areas while working to improve operating efficiency and expand service offerings. However, broader macroeconomic uncertainties remain key factors that could affect their growth and profitability.
CVS and CAH presently carry a Zacks Rank #3 (Hold) each. Based on the price performance, short-term price target and valuation metrics, CVS Health appears more favorable than Cardinal Health.
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CVS vs. CAH: Which Healthcare Services Stock Is the Better Pick Now?

CVS Health’s CVS 2026 revenues are now projected to be at least $414 billion, up from the earlier projection of at least $405 billion. The company also boosted adjusted earnings guidance to $7.90-$8.10 from $7.30-$7.50. However, it faces several challenges that could weigh on 2026 financial outlook.
In line with this, the company is exposed to reimbursement pressure across its government, retail pharmacy and PBM businesses. In second-quarter 2026, Pharmacy & Consumer Wellness segment’s growth was offset by regulatory-related price reductions, generic introductions and pharmacy reimbursement pressure.
The Health Services segment also absorbed pharmacy client price improvements, limiting revenues and adjusted operating income gains. CVS also views the 2027 Medicare Advantage payment update as insufficient to fully offset underlying medical cost trends. These factors require continued focus on purchasing economics, pricing discipline and contract structures to protect margins.
Additionally, the company continues to factor potential macro headwinds into its 2026 outlook. Inflation, tariffs, interest rates, unemployment and supply-chain disruption can affect costs, consumer behavior and cash flow across the enterprise. Front-store demand remains sensitive to shifts toward value, grocery and digital retailers, with same-store front-store sales rising just 1% year over year in the second quarter. Weaker consumer spending could further limit front-store growth.
Peer Update
Align Technology ALGN continues to operate in an uneven demand environment because orthodontic treatment and dental capital equipment purchases are sensitive to consumer and practice spending. The capital equipment market remained weak as higher interest rates and economic uncertainty affected scanner purchasing decisions. This contributed to a 10.8% year-over-year decline in Systems and Services revenues during the second quarter.
Regulatory developments add another cost consideration. In July 2026, the U.K. Upper Tribunal overturned the prior VAT-exemption ruling for clear aligners. Align recorded an estimated $37.5 million liability, including interest, and will begin applying 20% VAT to applicable U.K. Invisalign aligners and Vivera retainers from Sept. 7, 2026, without changing list prices. The company plans to appeal the decision, adding uncertainty around the ultimate financial impact.
Cardinal Health CAH still depends on large distribution relationships, making contract renewals and customer mix important to revenue scale and pricing. The fiscal 2025 OptumRx expiration demonstrated how a major contract change can alter reported growth and distribution volumes.
Global Medical Products and Distribution (“GMPD”) remains exposed to tariffs, fuel and commodity costs, and geopolitical disruption across its global sourcing network. CAH also stated that a prolonged conflict in Iran could move GMPD toward the lower end of its $200 million to $220 million segment profit range. The timing and magnitude of future tariff offsets remain uncertain, so trade policy and sourcing costs can still create volatility in GMPD earnings even as the improvement plan advances.
CVS’ Price Performance, Valuation and Estimates
Over the past year, CVS Health shares have risen 18.3% compared with the industry’s 13.2% growth.
CVS shares are trading at a forward one-year price-to-sales ratio of 0.27, lower than the industry average of 0.53. The stock has a Value Score of A.
The consensus estimate for the company’s 2026 earnings has been showing a bearish trend.
CVS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).

Here's What Might Affect CVS Health's 2026 Financial Outlook

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Schwab Fundamental U.S. Large Company ETF (Symbol: FNDX) where we have detected an approximate $818.5 million dollar inflow -- that's a 3.0% increase week over week in outstanding units (from 855,650,000 to 881,150,000). Among the largest underlying components of FNDX, in trading today Walmart Inc (Symbol: WMT) is up about 0.5%, AT&T Inc (Symbol: T) is up about 0.7%, and CVS Health Corporation (Symbol: CVS) is lower by about 1.1%. For a complete list of holdings, visit the FNDX Holdings page » The chart below shows the one year price performance of FNDX, versus its 200 day moving average:
Looking at the chart above, FNDX's low point in its 52 week range is $25.665 per share, with $32.845 as the 52 week high point — that compares with a last trade of $32.24. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further FNDX Research:

FNDX, WMT, T, CVS: Large Inflows Detected at ETF

BrightSpring Health Services’ BTSG Home and Community Pharmacy business is facing a meaningful revenue setback from the Inflation Reduction Act (IRA), but the company’s second-quarter performance suggests operational efficiency is helping sustain the profitability margin.
Revenues in the segment fell 8% year over year to $540 million, with management attributing part of the decline to an approximately $50 million IRA impact during the quarter, alongside the exit from certain uneconomic customers. For full-year 2026, BrightSpring expects the IRA to reduce Home and Community Pharmacy revenues by approximately $200 million.
The more important consideration for investors is the relatively limited impact on EBITDA. Management continues to expect the full-year EBITDA impact from the IRA at approximately $15 million, despite the $200 million revenue headwind. This indicates that the regulatory pricing changes are having a substantially greater effect on reported revenues than on profitability.
In the second quarter, Home and Community Pharmacy EBITDA increased year over year despite the external IRA and payer pressures. Management attributed the improvement to continued operational process enhancements and the deployment of new technologies.
Technology, automation and AI remain central to BrightSpring’s efficiency strategy. The company is using these tools across operational processes, while Lean initiatives and procurement improvements are contributing to efficiency generation. Management expects these investments to continue benefiting the business into 2027.
BrightSpring estimates that the 2027 IRA impact on Home and Community Pharmacy will be roughly 50% of the 2026 impact, while also pursuing regulatory, payer-contracting and operational measures to mitigate the pressure. Thus, although IRA pricing changes remain a revenue constraint, improving efficiency and a lower expected regulatory burden could help protect the segment’s profitability trajectory.
Peer Updates
Cardinal Health CAH has entered fiscal 2027 facing regulatory pressure from Inflation Reduction Act pricing changes, with WACC adjustments creating an estimated 500-basis-point Pharma revenue headwind. However, management expects little to no profit impact as service compensation and distribution agreements protect economics.
Cardinal Health continues working with manufacturers and customers to adapt to changing transaction models while leveraging long-term relationships for stability. Manufacturer pricing adjustments could affect revenue flows, but the company expects Pharma profitability to remain supported by brand and generic volumes and higher-margin Specialty operations. Overall, Cardinal Health appears positioned to absorb policy-driven revenue pressure without significant margin deterioration.
CVS Health's CVS pharmacy economics is already getting affected by the regulatory drug-price reductions, although the company did not separately quantify the IRA's specific margin impact. Pharmacy & Consumer Wellness revenues were pressured by regulatory-related price reductions on certain drugs, generic introductions and reimbursement pressure, while adjusted operating income still increased more than 10% year over year.
In Caremark, CVS is transitioning toward net-cost pricing models amid regulatory developments, with management emphasizing that the transition is intended to preserve the value delivered by the PBM. The company also expects to maintain margins at historical industry levels over time, supported by specialty pharmacy, generic penetration, purchasing economics and operational improvements.
BTSG’s Price Performance, Valuation and Estimates
Shares of BTSG have surged 57.4% year to date compared with the industry’s 3.8% growth.
From a valuation standpoint, BrightSpring Health Services trades at a forward price-to-earnings of 27.61X, above the industry average. It is also trading higher than its three-year median of 22.07X. BTSG carries a Value Score of B.
The Zacks Consensus Estimate for BrightSpring Health Services’ 2026 earnings implies an 82% rise from the year-ago period’s level.
The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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BTSG Faces $200M IRA Hit but Efficiency May Protect Profitability

(RTTNews) - Aetna, a CVS Health company (CVS), announced that it has expanded its bundled prior authorization program across all cancer types for eligible Medicaid members, with the expansion effective September 1, 2026.
The initiative is designed to simplify the prior authorization process for oncology care by combining multiple cancer-related treatments and services into a single authorization request, potentially reducing administrative work for providers and helping members access approved care more efficiently.
Aetna said providers were submitting an average of four separate prior authorizations for each member requiring cancer treatment.
Under the bundled approach, medical oncology services, including chemotherapy and immunotherapy where appropriate, and/or radiation oncology services can be combined with related high-tech imaging requirements such as MRI and CT scans.
The bundled requests are submitted through a single secure portal, allowing providers to obtain approval for a broader set of services associated with a patient's treatment plan.
Aetna reported that nearly 25% of eligible members received a bundled prior authorization during the initial rollout, supporting the company's broader expansion of the program across its healthcare businesses.
The expansion currently supports eligible Medicaid members in states where participating providers use the Eviti portal to submit prior authorizations, including Oklahoma, Illinois, Maryland, New Jersey, Virginia, Florida, Kentucky and West Virginia.
Aetna said the bundled approach is intended to give oncologists greater flexibility as treatment plans evolve while reducing the need for multiple authorization submissions during a patient's cancer care journey.
Administrative burden remains a significant challenge for healthcare providers. According to Aetna's latest Provider Survey, 74% of providers identified administrative burden as the top challenge facing clinical staff, while 31% cited prior authorization management as the largest contributor.
Aetna's survey also found that 30% of respondents believed technology solutions such as bundled authorizations could save more than one hour per day on administrative tasks, while 80% expected to save more than 30 minutes daily.
The company plans to expand the bundled oncology prior authorization program across all of its lines of business in 2027.
Aetna expects to extend eligibility to Medicare and Commercial members during the first half of 2027.
The company serves an estimated 37 million people through health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, as well as Medicaid health care management services.
CVS Health had approximately 9,000 retail pharmacy locations, more than 1,000 walk-in and primary care medical clinics and approximately 87 million pharmacy benefits management plan members as of June 30, 2026.
CVS has traded between $69.51 and $110.68 over the past year. The stock closed Wednesday's trading at $91.72, down 2.93%. In pre-market trading, the stock is at $92.40, up 0.79%.

Aetna Broadens Bundled Cancer Care Approvals; Medicare Expansion Set For 2027

Cardinal Health CAH has entered fiscal 2027 with regulatory changes remaining a key headwind for its Pharma business, particularly the impact of Inflation Reduction Act (IRA) pricing changes. In the fourth quarter, IRA-related WACC changes represented an approximately 500-basis-point headwind to Pharma revenues, roughly offsetting a similarly sized GLP-1 tailwind.
For fiscal 2027, CAH expects the annualization of 2026 IRA price changes and implementation of 2027 changes to create a comparable revenue headwind, but management expects no adverse profit impact.
The key to CAH’s approach is maintaining compensation for the services it provides rather than absorbing the economics of regulatory changes. Management said the company works closely with customers and manufacturers to understand regulatory changes and their logistical implications, while maintaining that its compensation should not change as long as its role remains unchanged. The company also noted that the underlying transaction models may evolve, requiring CAH to adapt upstream or downstream.
Distribution agreements provide another layer of protection. CAH highlighted the durability of its core distribution business and its ability to remain compensated for the value it provides during regulatory transitions. Its long-term customer relationships, including a major GMPD renewal and an extended Kroger relationship, provide additional commercial stability.
Manufacturer pricing adjustments could still reshape revenue flows, particularly as IRA changes may involve rebates or WACC reductions. However, CAH says a large portion of the impact flows through revenues without materially affecting profitability. Management therefore expects policy-driven revenue pressure to coexist with continued Pharma profit growth, supported by brand and generic volumes and higher-margin Specialty operations.
Peer Updates
IRA pricing changes are creating a meaningful revenue headwind but a relatively limited direct EBITDA impact for BrightSpring Health Services BTSG. Management expects the IRA to reduce Home and Community Pharmacy revenues by approximately $200 million in 2026, or about $50 million per quarter, while estimating the corresponding EBITDA impact at only $15 million for the full year.
In Specialty and Infusion, the company expects roughly $175 million of revenue pressure but essentially no EBITDA impact. Management attributed this resilience to operational initiatives, including technology, automation and AI investments, which are improving efficiency and helping offset regulatory pressures.
CVS Health's CVS pharmacy economics is already getting affected by the regulatory drug-price reductions, although the company did not separately quantify the IRA's specific margin impact. Pharmacy & Consumer Wellness revenues were pressured by regulatory-related price reductions on certain drugs, generic introductions and reimbursement pressure, while adjusted operating income still increased more than 10% year over year.
In Caremark, CVS is transitioning toward net-cost pricing models amid regulatory developments, with management emphasizing that the transition is intended to preserve the value delivered by the PBM. The company also expects to maintain margins at historical industry levels over time, supported by specialty pharmacy, generic penetration, purchasing economics and operational improvements.
CAH’s Price Performance, Valuation and Estimates
Shares of CAH have gained 13.2% so far this year compared with the industry’s 5% growth.
From a valuation standpoint, Cardinal Health trades at a forward price-to-earnings of 18.12X, above the industry average. However, it is trading lower than its five-year high of 22.19X. CAH carries a Value Score of A.
The Zacks Consensus Estimate for Cardinal Health’s fiscal 2027 earnings implies an 11.5% rise from the year-ago reported number.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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CVS Health Corporation

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