CVS Health Corporation CVS delivered first-quarter 2026 adjusted earnings of $2.57 per share, up 14.2% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $2.21 by 16.38%.
Total revenues rose 6.2% year over year to $100.43 billion, topping the consensus mark of $94.37 billion by 6.41%. Operating execution improved across the enterprise, while days claims payable ended the quarter at 42.9 days.
Following the announcement, CVS shares climbed 4.8% in the pre-market session today.
CVS Posts Higher Revenues on Broad Segment Gains
CVS generated revenue growth across all three operating segments in the first quarter. Health Services remained the largest contributor, with segment revenues of $48.24 billion, up 11% year over year, reflecting pharmacy drug mix and brand inflation.
Health Care Benefits revenues increased 3.3% to $35.97 billion, supported by strength in the Government business. Pharmacy & Consumer Wellness revenues were essentially flat at $31.99 billion, as prescription growth and mix benefits were largely offset by regulatory-related price reductions and reimbursement pressure.
CVS Health Expands Consolidated Margins on Operating Leverage
CVS Health’s consolidated profitability improved as operating income rose faster than the top line. Operating income increased 38.7% year over year to $4.68 billion, supported by higher segment contributions and the absence of items recorded in the prior-year period.
CVS Health Corporation Price, Consensus and EPS Surprise
CVS Health Corporation price-consensus-eps-surprise-chart | CVS Health Corporation Quote
From a margin standpoint, gross profit (total revenues less cost of products sold and health care costs) increased to $15.62 billion from $14.40 billion a year ago. Gross margin expanded 40 basis points (bps) to 15.6%, while operating margin improved 110 bps to 4.7%.
Adjusted operating income rose 12.5% to $5.15 billion. Adjusted operating margin also improved 30 bps year over year, reaching 5.1%, aided by lower operating expenses of $10.94 billion compared with $11.02 billion last year.
CVS Health’s Cash Build Offsets Ongoing Debt Obligations
CVS Health ended the quarter with cash and cash equivalents of $9.54 billion, up from $8.45 billion at year-end 2025. Net cash provided by operating activities was $4.25 billion in the first quarter, supporting capital returns and balance sheet actions.
During the quarter, the company repaid $1.52 billion of long-term debt and paid $847 million in dividends. Long-term debt stood at $60.53 billion as of March 31, 2026, leaving continued deleveraging and disciplined capital deployment as important watch items alongside the operating recovery underway across the portfolio.
CVS Raises 2026 Outlook as Costs Stay Elevated
Management raised full-year 2026 targets following the quarter’s performance. CVS lifted its GAAP diluted earnings per share outlook to a range of $6.24-$6.44 (previously $5.94-$6.14) and boosted adjusted earnings guidance to the band of $7.30-$7.50 (earlier $7.00-$7.20). Going by the Zacks Consensus Estimate, adjusted EPS for 2026 is forecasted at $7.14.
Meanwhile, revenues for the year are projected to be at least $405 billion. The Zacks Consensus Estimate for the same stands at $406.01 billion.
The company also increased its cash flow from operations outlook to at least $9.5 billion (earlier at least $9.0 billion). CVS said that the update reflects increases in the Health Care Benefits and Pharmacy & Consumer Wellness segments while maintaining a cautious view for the remainder of the year, given elevated cost trends and potential macro headwinds.
Our Take on CVS Stock
CVS Health exited the first quarter of 2026 on a solid note, with both earnings and revenues beating the respective estimates. Health Care Benefit revenues gained from the strong underlying performance of the Government business and also delivered the sharpest profitability improvement of the quarter. In Health Services, the company continued to post strong top-line momentum.
Within Pharmacy & Consumer Wellness, growth in prescriptions filled was aided by incremental volume tied to CVS Health’s Rite Aid asset acquisitions completed in the third quarter of 2025. The segment’s growth was weighed down by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Also, the expansion of both margins in the quarter and the raised full-year guidance are highly promising for the stock.
CVS’ Zacks Rank & Key Picks
CVS Health currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are BrightSpring Health Services BTSG, Intuitive Surgical ISRG and Labcorp Holdings LH.
BrightSpring Health Services, currently carrying a Zacks Rank #2 (Buy), reported first-quarter 2026 adjusted EPS of 36 cents, which surpassed the Zacks Consensus Estimate by 34.5%. Revenues of $3.61 billion beat the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BTSG has an estimated long-term earnings growth rate of 47.2% compared with the industry’s 14.5% growth. The company topped earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 14.61%.
Intuitive Surgical, carrying a Zacks Rank #2 at present, posted first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Labcorp, carrying a Zacks Rank #2 at present, posted first-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 3.8%. Revenues of $3.54 billion outperformed the Zacks Consensus Estimate by 1%.
LH has an earnings yield of 6.9% compared with the industry’s 4.5% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 3.31%.
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This article originally published on Zacks Investment Research (zacks.com).