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%.
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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.
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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.
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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.
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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.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).