Update shared on04 Sep 2025
Despite ongoing external risks and policy uncertainty, analysts remain constructive on CVS Health, citing strong recent execution, conservative guidance with potential for upside, and compelling valuation, resulting in the consensus price target holding steady at $81.57.
Analyst Commentary
- Bullish analysts cite strong recent execution and early signs that fixes in the healthcare benefits segment are proving effective, supporting above-consensus earnings growth projections.
- Compelling valuation at current share levels leads to upgrades and higher price targets, with projected annual earnings growth of 14% through 2028 versus a 12% consensus.
- Analysts view management’s guidance as conservative, with potential for upside if first half healthcare benefits and specialty pharmacy trends persist, and as secular headwinds may already be priced in.
- Policy updates, such as the One Big Beautiful Bill Act, are seen as incrementally positive for managed care, but uncertainty around timing and implementation remains a moderating factor.
- While there are external risks (e.g., formulary exclusion decisions or possible regulatory action regarding drug coverage), the overall industry and company-specific trends, including strong specialty pharmacy inflation, support the current upbeat price targets.
What's in the News
- CVS Health is not currently offering COVID vaccines in 16 states due to regulatory constraints; the CDC panel's recommendation is pending and a decision is not expected for at least three weeks (NY Times).
- CVS has decided not to add Gilead's new HIV prevention drug, Yeztugo, to its commercial or ACA formularies, citing clinical, financial, and regulatory factors; the move may delay broader access until possible HHS action (Reuters, Leerink).
- Prescription drug denials among U.S. private insurers rose from 18.3% to 22.9% between 2016 and 2023, partly due to rising drug costs and automated claims processes; CVS is among major insurers impacted (NYT).
- Health insurers, including CVS, are seeking double-digit ACA premium increases for 2026, attributing hikes to higher healthcare costs and potential federal subsidy cuts (WSJ).
- U.S. judges have rejected legal challenges against the Medicare Drug Price Negotiation Program, upholding the federal government's authority on the issue; CVS is among the companies potentially affected by resulting policy changes (The Hill).
Valuation Changes
Summary of Valuation Changes for CVS Health
- The Consensus Analyst Price Target remained effectively unchanged, at $81.57.
- The Net Profit Margin for CVS Health remained effectively unchanged, at 1.94%.
- The Consensus Revenue Growth forecasts for CVS Health remained effectively unchanged, at 5.1% per annum.
Disclaimer
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