CVS

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. CVS Health stock has delivered a 58.7% return over the past three years, yet its current valuation checks still lean toward the shares looking inexpensive on several fronts. Recent headlines around growth in healthcare services and legal disputes create a mixed backdrop for anyone trying to work out what that price implies. Over the last three years CVS Health has returned 58.7%, which puts recent swings into context and suggests investors have already re-rated the stock meaningfully. Expectations around higher margin health services and weight management programs can support the current share price, while litigation over reimbursement practices and rising labor pressure at pharmacies may weigh on what investors are willing to pay. CVS Health screens as undervalued on most of Simply Wall St's checks, with 5 out of 6 signals pointing to a cheaper profile than many peers. The issue now is whether that apparent discount still offers enough compensation for the legal and operational risks that come with CVS Health at around US$94.91 a share. CVS Health delivered 38.0% returns over the last year. See how this stacks up to the rest of the Healthcare industry. The P/E ratio is a useful starting point for CVS Health because earnings remain a key yardstick for how investors value large, diversified healthcare groups. CVS Health currently trades on a P/E of about 24.8x, which is very close to the wider Healthcare industry average of 25.0x. Against a typical peer group at roughly 19.0x, the stock carries a clear premium on simple comparisons. However, Simply Wall St's fair P/E for CVS Health is materially higher at around 36.6x. This reflects its specific mix of earnings, margins, business risk and scale rather than just broad industry levels. Against that benchmark, the current 24.8x multiple represents a sizeable discount. Despite the recent legal dispute over 340B reimbursements and ongoing labor pressure at some pharmacies, the market is still pricing CVS Health below what this fair P/E framework suggests. On this earnings multiple, CVS Health shares appear undervalued relative to the fair P/E implied by its fundamentals and risk profile. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for CVS Health pick up where this valuation puzzle leaves off. They spell out the combinations of growth, margins and earnings that would need to play out for CVS Health's stock to be worth materially more or less than today's price, and sit on the company’s Community page. Where a single ratio or model outputs one figure, these narratives unpack the future behind that number so you can track whether it continues to line up with reality. One of the top community narratives on CVS Health: 9% undervalued Read one of the top narratives on CVS Health Do you think there's more to the story for CVS Health? Head over to our Community to see what others are saying! CVS Health screens as undervalued on the market multiple checks, with its current P/E below the fair ratio implied by its risk and earnings profile. That gap only matters if the company can keep building the higher margin health services story while managing the legal and labor issues that are already in view. For you, the key question is whether the market is underestimating CVS Health's ability to execute on that shift or correctly discounting the friction that comes with it. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CVS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

CVS Health CVS reported its second-quarter 2026 results on Aug. 5. Revenues reached $106 billion, while adjusted operating income came in at approximately $5.2 billion, up more than 7% and 35%, respectively, from the prior-year quarter. The company saw growth across both the top and bottom lines in all of its operating segments. Adjusted earnings per share (EPS) improved significantly, increasing 40% year over year to $2.58. CVS ended the quarter with approximately $2.7 billion of cash at the parent and unrestricted subsidiaries and a leverage ratio of roughly 3.5. Cumulative operating cash flow reached nearly $10.6 billion in the first half, reflecting strong earnings year to date and the impact of working capital improvements. Following the solid six-month performance, management raised its outlook for the full-year 2026 adjusted EPS and cash flow from operations. The quarterly results, however, did not translate into a stronger stock performance. CVS shares ended the session 5.1% lower than the previous day’s close. Over the past 12 months, the stock has climbed 32.4% compared with the industry’s 9.6% growth, the Medical sector’s 10.2% increase and the S&P 500 composite’s 23.7% gain. The stock has also fared better than peers UnitedHealth Group UNH and Elevance Health ELV, which have risen 29.8% and 25.1%, respectively, over the same period. Image Source: Zacks Investment Research The Health Care Benefits revenues increased 3.5%, driven by strength in the Government business. This growth was partially offset by the company’s strategic exit from the individual exchange business this year, which brought total medical membership down by roughly 700,000 members compared to the prior-year period. CVS is seeing significant momentum in Aetna's margin recovery, with year-to-date adjusted operating income expanding by more than $2 billion, reflecting the cumulative impact of the actions taken over the past two years. Medical benefit ratio was 87.4% compared to 89.9% in the prior year, with the impact of changes in our individual exchange risk adjustment position associated with the 2025 plan year as well as the impact of favorable prior-year development contributing roughly 140 basis points (bps). In Health Services, the top line grew 11.5% year over year, led by pharmacy drug mix and brand inflation. However, continued pharmacy client price improvements remained a drag on growth. Adjusted operating income growth of 10% was primarily driven by improved purchasing economics and pharmacy drug mix and modest improvement in the health care delivery business, which rose 23%. Pharmacy and Consumer Wellness revenues increased slightly in the quarter, driven by pharmacy drug mix, higher prescription volume, including contributions from the Rite Aid asset acquisitions, and brand inflation. Adjusted operating income grew 10%, primarily due to core pharmacy strength and incremental contributions from the Rite Aid transaction. CVS Health raised its full-year 2026 outlook across key financial metrics. The company now expects revenues of at least $414 billion, up from its previous forecast of at least $405 billion. Enterprise adjusted operating income is projected at $16.58 billion to $16.92 billion compared with the prior range of $15.53-$15.87 billion. Within this outlook, Health Care Benefits adjusted operating income is now expected to reach $5.03 billion to $5.37 billion, more than $1 billion above the previous guidance. Adjusted EPS is now expected in the range of $7.90-$8.10 compared with the prior range of $7.30-$7.50. The Zacks Consensus Estimate calls for the company’s EPS to increase 17.3% to $7.92 in 2026, followed by another 7% increase to $8.48 in 2027. The estimates have moved higher consistently over the past three months. Image Source: Zacks Investment Research CVS trades at a forward, five-year Price/Sales (P/S) of 0.28X, slightly above its historical median of 0.26X but well below the 0.52X industry average. It has a Value Score of A. Image Source: Zacks Investment Research By comparison, peers UnitedHealth Group and Elevance Health command higher valuations, trading at a P/S of 0.80X and 0.44X, respectively. In the second quarter, CVS Caremark’s 340B business faced some pressure. Restrictions imposed by pharma manufacturers on covered entities and some large specialty drugs turning generic weighed on the program. Though the impact was offset by strength in other parts of Caremark, management expects these pressures to persist and pose a headwind in 2027. Caremark’s membership decline remains another challenge next year. The fall is expected to result from CVS’ transition to the lowest-net-cost pricing model and taking a more deliberate approach to client renewals and the selling season. Product actions and market exit by some of the company’s health plan customers will also likely play a role. Medical cost utilization remains a key risk to Aetna’s recovery despite the improvement seen in the first half of 2026. Macroeconomic factors, including inflation, tariffs, interest rates, unemployment and supply-chain disruption, can affect costs, consumer behavior and cash flow across the enterprise. CVS Health’s latest results show strength across key parts of the business and continued progress in Aetna’s margin recovery. Pharmacy & Consumer Wellness maintained solid momentum, while Health Services benefited from drug mix and brand inflation. Health Care Benefits also gained from strength in the Government business. The raised full-year guidance adds to the positive outlook. At the same time, Caremark’s 340B pressures and expected membership declines remain notable near-term hurdles, while higher medical cost utilization could slow Aetna’s margin recovery. The stock has outperformed its industry, sector and peers over the past 12 months. Valuation also remains attractive, with CVS trading at a lower sales multiple than its industry and peers. Given these factors, existing shareholders may want to retain their position. Prospective investors, however, should wait for a more favorable entry point. CVS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 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 CVS Health Corporation (CVS) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Elevance Health, Inc. (ELV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CVS Health CVS is entering the second half of 2026 with stronger earnings momentum, higher cash generation and an improved Aetna profit outlook. Those gains strengthen the recovery case after a difficult period for the insurer. The trade-off is that medical-cost pressure and changing pharmacy benefit manager economics remain unresolved. CVS trades below major valuation benchmarks, but its multiple is already above its own five-year median. The Zacks Consensus Estimate for 2026 earnings has increased 7.9% over the prior four weeks, while projected 2026 EPS growth stands at 16.6%. Current cash flow growth of 65.3% adds another positive signal. Second-quarter results support that trend. Adjusted EPS increased 42.5% year over year to $2.58, while adjusted operating income rose 35.4% to $5.16 billion. CVS also raised 2026 adjusted EPS guidance to $7.90-$8.10. Image Source: Zacks Investment Research CVS trades at 11.7X forward 12-month earnings, below the Zacks sub-industry's 16.2X and the S&P 500's 20.8X. The gap shows that investors still assign CVS a sizable discount despite improving earnings. Image Source: Zacks Investment Research The stock is less cheap against its own history. CVS' five-year median forward multiple is 10.3X, below the current level. Relative valuation is favorable, but the shares are not unusually inexpensive compared with their historical norm. Health Care Benefits is the clearest operating reason for greater confidence. Adjusted operating income increased by more than $2 billion year over year in the first half of 2026 as pricing discipline and medical-cost management improved profitability. CVS raised the segment's 2026 adjusted operating income outlook to $5.03-$5.37 billion, more than $1 billion above prior guidance. The medical benefit ratio improved to 87.4% in the second quarter from 89.9% a year earlier, showing measurable progress in the margin-recovery plan. The recovery still faces pressure from elevated medical utilization and reimbursement changes. CVS continues to take a prudent view of second-half medical costs, while retail pharmacy and pharmacy services face reimbursement and client-pricing pressure. Caremark adds uncertainty. Weaker 340B conditions are expected to create a 2027 earnings headwind, while management anticipates lower pharmacy benefit manager membership next year. Specialty pharmacy and generic opportunities may offset part of that pressure, but uneven earnings remain possible. The Cigna Group CI is relevant because its Evernorth Health Services business includes pharmacy benefit and related health-service operations. Cigna therefore offers another diversified model exposed to benefit-management economics. UnitedHealth Group UNH combines a large insurance franchise with health-services operations through Optum. It provides another useful reference point for investors assessing medical-cost and health-services trends across managed care. The bottom line is that CVS has better earnings momentum and a favorable relative valuation, but execution risk remains. Aetna is improving, while medical utilization, reimbursement pressure and Caremark's 2027 reset argue for more evidence that the gains can persist. CVS currently carries a Zacks Rank #3 (Hold), which fits that mixed setup rather than signaling an aggressive entry point. The stock also has a Value Score of A, Growth Score of A, Momentum Score of A and VGM Score of A. Those scores indicate favorable characteristics across several styles, but they are designed to complement the Zacks Rank. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 CVS Health Corporation (CVS) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Cigna Group (CI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CVS Health’s second quarter was marked by better-than-expected revenue and profit, but investor sentiment was dampened by rising concerns over sustainability of these results. Management cited strong performance across all business segments, particularly from specialty pharmacy and Medicare Advantage, as key drivers. CEO David Joyner acknowledged, “the cumulative impact of these actions [in Aetna and Caremark] is starting to come through clearly in our results.” However, management also highlighted pockets of pressure, such as ongoing challenges in the 340B program and the normalization of script share gains from Rite Aid. Is now the time to buy CVS? Find out in our full research report (it’s free). Revenue: $106.1 billion vs analyst estimates of $99.41 billion (7.3% year-on-year growth, 6.7% beat) Adjusted EPS: $2.58 vs analyst estimates of $1.85 (39.4% beat) Adjusted Operating Income: $5.16 billion vs analyst estimates of $3.95 billion (4.9% margin, 30.6% beat) Management raised its full-year Adjusted EPS guidance to $8 at the midpoint, a 8.1% increase Operating Margin: 4.4%, up from 2.4% in the same quarter last year Locations: 8,931.1 at quarter end, down from 8,999 in the same quarter last year Same-Store Sales rose 2.6% year on year (15.4% in the same quarter last year) Market Capitalization: $119.6 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Michael Cherny (Leerink Partners) asked about the ability to offset 340B headwinds in Health Services. CFO Brian Newman reiterated confidence in enterprise earnings growth, while President Prem Shah pointed to specialty pharmacy and biosimilars as mitigating factors. Lisa Gill (JPMorgan) questioned the sustainability of Aetna’s improved margins and the long-term opportunity from GLP-1 drugs. Head of Aetna Steven Nelson emphasized Medicare Advantage momentum, and Joyner noted both funded and direct-to-consumer GLP-1 channels as growth drivers. Justin Lake (Wolfe Research) probed on the durability of pharmacy growth as Rite Aid share gains normalize. Prem Shah described investments in service, technology, and the CostVantage model as drivers of future stability. Stephen Baxter (Wells Fargo) asked about commercial insurance margins and the impact of the No Surprises Act. Nelson explained that pricing discipline and technology solutions have kept the commercial business in line, despite challenges in dispute resolution processes. Erin Wilson Wright (Morgan Stanley) sought detail on AI and technology investment cadence. Joyner and Nelson described AI as central to CVS’s future, with $20 billion committed over a decade and concrete operational savings already realized. Looking ahead, the StockStory team will be monitoring (1) the pace of GLP-1 adoption and the expansion of consumer-facing offerings, (2) the impact of AI-driven platforms like Health100 and Haio on efficiency and consumer engagement, and (3) progress on Aetna margin recovery and group Medicare Advantage renewals. We will also be watching for updates on 340B program headwinds and Caremark membership changes as contract dynamics evolve. CVS Health currently trades at $93.52, down from $104.42 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

CVS Health CVS raised its 2026 earnings and cash-flow outlook after a second quarter marked by stronger profitability across all operating segments. The improvement gives the company more room to rebuild margins after a difficult period for its Aetna insurance business. The recovery is gaining traction, but the path is not risk-free. Medical-cost pressure, reimbursement changes and a changing pharmacy benefit manager environment could still test the durability of the higher outlook. Second-quarter adjusted earnings rose 42.5% year over year to $2.58 per share, while revenues increased 7.3% to $106.10 billion. Adjusted operating income advanced 35.4% to $5.16 billion, reflecting gains across all operating segments. Health Care Benefits delivered the largest earnings improvement, while Health Services and Pharmacy & Consumer Wellness also posted higher adjusted operating income. That broader contribution matters because the recovery is not resting on a single business line. CVS lifted its 2026 adjusted EPS guidance to $7.90-$8.10 from $7.30-$7.50. The company now expects consolidated revenues of at least $414 billion and adjusted operating income of $16.58-$16.92 billion. Here’s where consensus estimates for the company’s revenues and earnings currently stand. Image Source: Zacks Investment Research Expected cash flow from operations also rose to at least $11.5 billion from at least $9.5 billion. The stronger cash outlook supports further leverage improvement after the company ended the second quarter with a leverage ratio of about 3.5 times. Aetna's Health Care Benefits business is becoming a larger earnings contributor as pricing discipline and medical-cost management improve results. Second-quarter adjusted operating income reached $2.43 billion, up 85.5% year over year, while the medical benefit ratio improved to 87.4% from 89.9%. CVS raised the segment's 2026 adjusted operating income outlook to $5.03-$5.37 billion, more than $1 billion above its prior guidance. Management expects the full-year medical benefit ratio to be about 89.75%, plus or minus 25 basis points, while continuing to take a prudent view of second-half medical costs. The higher outlook does not remove execution risk. CVS expects the Health Care Benefits medical benefit ratio to rise materially through the second half, while reimbursement pressure continues in retail pharmacy and pharmacy services. Weakness in the 340B business is also expected to create a 2027 headwind. Caremark faces another transition as regulatory changes and the shift toward net-cost pricing reshape pharmacy benefit manager economics. Management also expects lower Caremark membership in 2027 as it takes a more disciplined approach to contract renewals and some health-plan clients exit products or markets. Peer results show that managed-care and pharmacy-services operators are also adjusting to changing cost and contracting conditions. UnitedHealth Group UNH raised its 2026 adjusted earnings outlook after its second quarter, while The Cigna Group CI increased its 2026 adjusted income outlook after reporting year-over-year revenue and earnings growth. CVS has clearer operating momentum than it did a year ago, led by Aetna's margin recovery, stronger pharmacy execution and higher cash generation. Still, the second-half medical-cost trajectory and 2027 pharmacy-services headwinds argue for a measured view rather than assuming the recovery is complete. The stock currently carries a Zacks Rank #3 (Hold). CVS also has a Value Score of A, Growth Score of A, Momentum Score of A and VGM Score of A. Those favorable Style Scores point to attractive characteristics across valuation, growth and momentum, but the Zacks Rank keeps the near-term signal balanced as investors assess whether the higher guidance can translate into sustained. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 CVS Health Corporation (CVS) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Cigna Group (CI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:00 a.m. ET Executive Vice President of Capital Markets - Larry McGrath Chair and Chief Executive Officer - David Joyner Chief Financial Officer - Brian Newman Operator: Hello, and welcome to CVS Health Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I would now like to pass the call over to Larry McGrath. Larry, please proceed. Larry McGrath: Good morning, and welcome to the CVS Health Second Quarter 2026 Earnings Call and Webcast. I'm Larry McGrath, Executive Vice President of Capital Markets at CVS Health. I'm joined this morning by David Joyner, Chair and Chief Executive Officer; and Brian Newman, Chief Financial Officer. Following our prepared remarks, we'll host a question-and-answer session that will include additional members of the leadership team. Our press release and slide presentation have been posted to our website, along with our Form 10-Q filed this morning with the SEC. Today's call is also being broadcast on our website. During this call, we'll make certain forward-looking statements. Our forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from currently projected results. We strongly encourage you to review the reports we file with the SEC regarding these risks and uncertainties, in particular, those that are described in the cautionary statement concerning forward-looking statements and risk factors in our most recent annual report on Form 10-K, our quarterly report on Form 10-Q filed this morning and our recent filings on Form 8-K, including this morning's earnings press release. During this call, we'll use certain non-GAAP measures when talking about the company's financial performance and financial condition, and you can find a reconciliation of these non-GAAP measures in this morning's press release and in the reconciliation document posted to the Investor Relations portion of our website. With that, I'd like to turn the call over to David. David? J. Joyner: Thank you, Larry, and good morning, everyone. I'm proud to share that this quarter, each of our operating segments grew earnings and delivered performance that exceeded our expectations. We generated adjusted operating income of $5.2 billion and adjusted earnings per share of $2.58. These results reflect a clear and deliberate enterprise-wide focus on building trust by executing against our commitments to consumers, colleagues and shareholders. Building on this strong performance so far this year, we are raising our full year 2026 adjusted earnings per share guidance by $0.60 to a range of $7.90 to $8.10. We are also updating our full year expectation for cash flow from operations to at least $11.5 billion, a meaningful increase of $2 billion from our prior guidance. These expectations reflect the core principles of our guidance philosophy, credible targets, disciplined execution and clear opportunities for outperformance. Brian will provide more details on our updated guidance as well as some early high-level preliminary commentary for 2027 later in the call. Across CVS Health, our focus remains on helping people more easily access affordable care, navigate the health care system and engage in their health. One clear example of how we're doing this is through our work supporting patients utilizing GLP-1s for weight loss. As demand for these therapies continue to grow, consumers are increasingly focused on 3 things: affordability, access and convenience. CVS Health is a leader in all 3. For employers looking to provide coverage for their workforce, Caremark continues to lead the industry by taking formulary actions that will increase availability of these drugs at a lower cost. However, despite these efforts, affordability challenges mean not all employers can cover GLP-1s for weight loss. As more consumers seek access to these therapies outside of traditional benefit designs, CVS Health's comprehensive direct-to-consumer platform provides a trusted, convenient and affordable pathway to care. MinuteClinic's 24/7 virtual weight management offering is the lowest cost option in the industry, connecting eligible patients with a licensed clinician for just $29. Through our manufacturer relationships and CVS Pharmacy's omnichannel fulfillment capabilities, eligible patients can access GLP-1 therapies for as little as $149 through cash pay options in the way that's most convenient to them. We're also simplifying navigation and making it easier for patients to find the most affordable option available to them. Later this year, through our new partnership with Eli Lilly, eligible Zepbound and Foundayo patients will be able to access cash pay pricing for same-day pickup directly through CVS Health's app or in our stores. This builds on our existing relationship with Novo to dispense oral and injectable Wegovy, making CVS Pharmacy a convenient, affordable destination for all FDA-approved GLP-1s. As more consumers begin these therapies, the role of our nearly 30,000 pharmacists is an important differentiator for us. They help patients manage common side effects, answer questions and ensure they stay on therapy. These trusted pharmacist relationships and our omnichannel capabilities are especially important for seniors. With the launch of Medicare Bridge last month, CVS Pharmacy is helping seniors navigate the program and access these therapies more easily. At the same time, we're creating a new source of prescription volume as affordability barriers come down. Across CVS Health, we are best positioned to improve affordability, expand access, enhance the consumer experience and capture the opportunities ahead regardless of how consumers choose to access GLP-1s. Our work with GLP-1s is one example of how we can bring our assets together around the consumer need. More broadly, that same focus on simplicity, access and engagement is driving our consumer technology strategy. Last month, we began the targeted launch of our Health100 platform, including Haio, our new AI-powered assistant. Haio is designed to simplify the consumer experience and help people engage more effectively in their care journey. Early feedback has been encouraging, and we are excited to expand access later this year. Simplifying health care for consumers also requires making the system easier for the providers who care for them. That is why becoming the partner of choice for providers is such an important priority for us. We spend a great deal of time listening to providers and understanding where they experience the most friction in the health care system. Consistently, we hear the same themes: reducing prior authorization burdens, streamlining claims and improving access to real-time patient information. Our recent national provider survey reinforced those priorities and confirm that we are making meaningful progress. Those insights are also helping reinforce the actions we're taking across our businesses to simplify interactions and improve experiences. We've recently launched a new AI-enabled claims assist manager, which will reduce our processing time by over 20% and accelerate payment for providers on hundreds of millions of claims every year. We're also expanding the Aetna clinical collaboration program that we announced last year. This program embeds our nurses directly into the facilities to work alongside hospital staff during critical care transitions. It also helps create a more connected experience for both providers and members through improved coordination and communication. Together, these efforts are making us easier to work with and helping strengthen our position in the market. Those same principles, better connectivity, less friction and faster access to information are also guiding the work we're doing in our care delivery business. We've implemented technology infrastructure changes to modernize our platforms and accelerate data sharing and connectivity with providers and payer partners. We continue to expand and refine our use of AI and analytics to reduce provider administration burden and support better, more connected care for patients. This includes appropriate use of AI to analyze over 1 billion pages of clinical records to enable more personalized and coordinated care. As we drive towards improved performance in this business, technology enhancements such as these are instrumental in positioning us for long-term success. Across these efforts, we're building capabilities that further differentiate CVS Health in the marketplace. While we position ourselves for the future, we're not losing sight of the need to deliver best-in-class performance across each of our businesses. At Aetna, we put an industry-leading team in place and the deliberate coordinated actions we've discussed over the last 2 years continue to improve both our results and positioning. We're strengthening our clinical programs, improving the way we operate and maintaining a disciplined approach to cost management and pricing. What you see now is the cumulative impact of these actions starting to come through clearly in our results. So far this year, we've delivered more than $2 billion of year-over-year improvement in adjusted operating income, reflecting both our commitment to restoring this business to its full potential and the consistency of execution behind it. In our Caremark business, we've been leading the transition towards greater transparency for several years, especially at the pharmacy counter where consumers can feel the impact of high-priced drugs. With recent legislation and regulatory developments, including our proposed settlement with the FTC, we expect the transition to net cost price models to accelerate while preserving the value PBMs deliver to clients, members and the entire health care system. Our teams remain intensely focused on executing this transition. At the same time, we continue to build on the strength of CVS Specialty, the leading specialty pharmacy in this country. Success in this critically important fast-growing category requires the ability to bring together clinical expertise, data and analytics and personalized engagement to support complex patients across their full therapy journey. And that's exactly what we do. Building on that foundation, our focus on technology, automation and embedding AI into our processes have made CVS Specialty the most tech-enabled specialty pharmacy in the industry. Our tools and processes are designed to identify patients earlier, initiate therapy faster and support them continuously to help improve adherence and outcomes. While others in the industry are working towards achieving the standard of 80% adherence, CVS Specialty consistently operates above 90%. At CVS Pharmacy, we continue to build momentum, grow volumes and deliver strong results. Our improving performance reflect both the impact of deliberate actions we've taken to position this business for long-term success and the discipline with which we are executing every day. Health care is local and best delivered by trusted, caring and tech-enabled colleagues that are part of the communities they serve. This is why maintaining pharmacy access across the country is so important. We, along with others, are challenging unconstitutional laws in states like Arkansas and Tennessee that will make care more expensive, less accessible and more complicated for patients. Our teams are working hard to achieve the best possible outcome as this develops. At the same time, we are strengthening our omnichannel and engagement capabilities to meet consumers where they are, creating more seamless experience across our stores and digital platforms. This is how we help ensure that we continue to support the millions of Americans that depend on CVS Pharmacy and maintain our position as the best run national pharmacy in the country. To summarize, we are doing what we said we would. We delivered strong results, exceeded our expectations and raised our outlook for the year. More importantly, we're continuing to make meaningful progress towards becoming America's most trusted health care company. Across each of our businesses, the deliberate actions we've taken are strengthening our position in the market and creating opportunities for distinction and long-term sustainable growth. We are seeing those efforts translate into better experiences for our consumers, providers and clients while delivering stronger performance across CVS Health. We are encouraged by the momentum we're seeing and confident in our ability to continue delivering on our commitments. With that, I'll turn it over to Brian to walk through the financial details. Brian Newman: Thank you, David, and good morning. I will cover 4 key topics in my remarks this morning. First, an update on our second quarter results. Second, I'll discuss cash flow and the balance sheet. Third, I'll provide an updated financial outlook for 2026. And finally, I will share some early high-level commentary on 2027. As David just highlighted, our strong second quarter results demonstrate the discipline with which we are managing the enterprise and exemplify our say-do philosophy as we continue to execute our strategic priorities and deliver on our commitments. Let me start by highlighting some of our enterprise results in the quarter. We generated over $106 billion of revenue and delivered approximately $5.2 billion of adjusted operating income, increases of over 7% and 35%, respectively, from the prior year quarter. These increases were broad-based as we experienced growth across both the top and bottom line in all of our operating segments. We delivered adjusted EPS of $2.58, a significant increase of over 40% from the prior year quarter. And finally, we generated year-to-date cash flow from operations of approximately $10.6 billion. Turning now to each of our segments. In Health Care Benefits, we generated over $37 billion of revenue in the quarter, an increase of over 3% from the prior year. This increase was primarily driven by our government business, partially offset by our exit from the individual exchange business in 2026. Medical membership as of quarter end of approximately 26 million members remained consistent sequentially and declined approximately 700,000 members from the prior year quarter. The year-over-year decrease was primarily driven by our previously discussed exit from the Individual exchange business, partially offset by growth in our commercial fee-based membership. Adjusted operating income in the quarter was approximately $2.4 billion, and our medical benefit ratio was 87.4%, both of which improved meaningfully from the prior year quarter as we continue to execute on our margin recovery. These results include the impact of changes in our individual exchange risk adjustment position associated with the 2025 plan year as well as the impact of favorable prior year development. Together, these items contributed approximately $500 million or 140 basis points to our MBR in the quarter. Excluding these items, our core performance in the quarter still exceeded our expectations. This core outperformance was largely concentrated in our Medicare business, where we continue to experience pockets of favorability as a result of strong medical cost management and disciplined pricing. Our Medicaid and Commercial businesses performed in line with our expectations during the quarter. We remain confident in the adequacy of our reserves. Shifting now to our Health Services segment. During the quarter, we generated revenues of nearly $52 billion, an increase of over 11% from the prior year quarter. This increase was primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements. We delivered adjusted operating income of over $1.7 billion, an increase of 10% from the prior year quarter, primarily driven by improved purchasing economics, pharmacy drug mix and modest improvement in our health care delivery business. These increases were partially offset by pharmacy client price improvements. At Caremark, we continue to make progress against our priorities. Within Caremark's results in the quarter, there are a few items to call out. We experienced some pressure in our 340B business as the environment for this program remains dynamic. We also experienced a pull forward of value previously expected to occur in the second half of the year. After adjusting for the pull forward, our underlying results were in line with our expectations as outperformance across the broader Caremark business, including higher specialty generic penetration rates, offset the pressure in 340B. We are encouraged by our continued progress in our health care delivery business, which performed in line with our expectations during the quarter. Total revenues grew nearly 23% compared to the same quarter last year, primarily driven by Oak Street Health. Our Pharmacy and Consumer Wellness segment delivered an exceptional quarter and continues to build momentum. We generated revenues of nearly $34 billion, a slight increase from the prior year quarter, primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Rite Aid transaction we completed last year and brand inflation. These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure. On a same-store basis, total revenues increased modestly in the quarter and same-store pharmacy sales grew approximately 3%. These increases were driven by the revenue drivers I previously mentioned, including a 7% increase in same-store prescription volumes. Same-store front store sales increased 100 basis points versus the prior year quarter. We delivered adjusted operating income of nearly $1.5 billion, an increase of over 10% from the prior year, primarily driven by core pharmacy strength and contributions from the Rite Aid transaction, partially offset by continued business investments and the impact of consumer dynamics. Turning now to cash flow and the balance sheet. In the first half of the year, we generated cash flow from operations of approximately $10.6 billion. This result reflects strong earnings year-to-date as well as the impact of improvements in working capital. We returned over $1.7 billion to our shareholders through our shareholder dividend year-to-date. We ended the quarter with approximately $2.7 billion of cash at the parent and unrestricted subsidiaries. Our leverage ratio at the end of the quarter was approximately 3.5x, and we expect to drive further improvement as we continue to execute against our 2026 outlook. Shifting now to our guidance for 2026. As David mentioned, we are increasing our full year 2026 guidance for adjusted EPS to a range of $7.90 to $8.10, an increase of $0.60 or 8% higher than our previous guidance. We now also expect our full year total revenues to be at least $414 billion. In our Health Care Benefits segment, we now expect full year adjusted operating income to be in a range of $5.03 billion to $5.37 billion, an increase of over $1 billion relative to our prior guidance. This increase reflects a portion of our strong underlying core performance in the first half of the year as well as the approximately $500 million cumulative impact of our net risk adjustment update and the prior year development experienced in the second quarter. We now expect a full year MBR of 89.75%, plus or minus 25 basis points. This outlook continues to maintain a respectful and prudent view of medical cost trends in the second half of the year. In our Pharmacy and Consumer Wellness segment, we now expect full year adjusted operating income of at least $6.4 billion, an increase of $220 million from our prior guidance. This reflects our strong performance in the quarter and our updated expectations for the remainder of the year, which includes the continuation of strong pharmacy performance. We are also pleased to reiterate our full year adjusted operating income outlook for our Health Services segment. This outlook reflects continued strong performance across our Pharmacy Services businesses, offset by our updated view of 340B. In aggregate, we now expect full year enterprise adjusted operating income to be in the range of $16.58 billion to $16.92 billion. We are also increasing our outlook for full year cash flow from operations to at least $11.5 billion, reflecting our updated earnings outlook as well as the impact of improvements in working capital. As a reminder, our current outlook does not assume any share repurchases this year. We will continue to evaluate capital deployment opportunities as our leverage position improves. We expect second half EPS to be more weighted to the third quarter, reflecting typical seasonality. We now expect the increase between our first quarter and fourth quarter MBR in our Health Care Benefits business to be slightly higher than 950 basis points after adjusting for the impact of prior year development in the first quarter. You can find additional details on the components of our updated 2026 guidance on our Investor Relations website. As you can see, we are making meaningful progress unlocking our embedded earnings power and continue to feel confident in the mid-teens adjusted EPS CAGR from 2025 through 2028 that we laid out at our recent Investor Day. Consistent with our historical approach, we intend to share 2027 headwinds and tailwinds on our third quarter call and detailed full year guidance on our fourth quarter call. As you know, David and I have emphasized the importance of being open and transparent with our shareholders. This year, in the spirit of this commitment, we are pulling forward our commentary on 2027 by a quarter as we wanted to discuss some dynamics in our businesses that we are aware of today. We are seeing significant momentum in Aetna's margin recovery, including the more than $2 billion of improvement in adjusted operating income that we've already delivered this year. The actions we have taken to strengthen our foundation and improve our performance are working, and we expect this momentum to continue on our pathway back to target margins over the next couple of years. In our Pharmacy Services business, we expect the previously discussed market dynamics in our 340B business to continue and result in a headwind in 2027. Additionally, we believe we will see membership declines in Caremark next year. There are 2 main reasons. First, while we are working through the transition to a pricing model grounded in the lowest net cost over the next few years, we need to make sure our current agreements reflect underwriting to appropriate risk and contracting structures, and we have taken a deliberate approach to our client renewals and the selling season. As you are aware, we are already managing through industry dynamics that are having an impact on our legacy contracts. Second, product actions and market exits by some of our health plan customers will result in a membership impact. These headwinds will be partially offset by our industry-leading specialty pharmacy business, which continues to benefit from strong execution and secular trends in the market, including a robust generic portfolio in 2027. Despite these near-term earnings pressures, we remain confident in the value our pharmacy services businesses deliver to clients and our ability to achieve fair margins consistent with historical levels in the industry over time. Elsewhere in Health Services, we remain on track, driving improved results in our health care delivery business. We are also building strong momentum in our PCW business. You can already see this in the second consecutive year of mid-single-digit growth reflected in our updated guidance. We continue to differentiate ourselves in the market through our deliberate actions and intentional investments and have established CVS Pharmacy as the best-run national pharmacy. These actions are what allowed us to change the trajectory of this business, and we are excited to carry that momentum into 2027. So putting the pieces together across the enterprise, we remain confident in the mid-teens adjusted EPS CAGR from 2025 through 2028 that we outlined at our Investor Day. While we would not normally comment on 2027 consensus this early in the year, an outlook of at least $8.44, consistent with current consensus appears reasonable at this juncture. This represents EPS growth of about 13% off an adjusted baseline of $7.46. This baseline reflects the midpoint of our updated EPS guidance and consistent with our guidance convention excludes prior year development and prior year items in our individual exchange business, which we have exited. Importantly, these expectations continue to be grounded in our guidance philosophy of establishing credible targets, delivering with disciplined execution and highlighting opportunities for outperformance. Before we open the call for questions, I want to reiterate how encouraged we are by our performance this quarter. We delivered year-over-year revenue and adjusted operating income growth across all our operating segments. Our performance so far in 2026 is a testament to our intense focus and disciplined execution as we continue to do what we said we would do and highlights our ability to unlock the significant earnings opportunity of CVS Health. With that, we will now open the call to your questions. Operator? Operator: [Operator Instructions] We'll take our first question from Michael Cherny with Leerink Partners. Michael Cherny: Really nice job on the quarter. If we could, I'd love to dive in a bit more to the headwinds and tailwinds you discussed on a preliminary basis for '27, in particular, around HSS. As you think about the dynamics of managing to some level of growth trajectory, how do you feel about the opportunities, whether it's conversion on formulary, whether it's specialty dynamics that are within your control? And how do you think about the pathway forward to offset and mitigate, in particular, the 340B headwinds given that it does seem to be a moving target within D.C. right now? J. Joyner: Thank you, Michael, and I appreciate the comments on the quarter. I'm going to have -- I'm going to do this in 2 parts. I'm going to have Brian give you kind of the broader financial view of HSS, and then I'm going to have Prem give some color commentary on some of the specifics that you asked. So Brian? Brian Newman: Thanks, David. And Mike, thanks for the question. And I'll take you back to Investor Day, and we always saw multiple pathways to achieving our target of a mid-teens EPS CAGR. And I think if you look at this year, Mike, based on the strength of our performance across the enterprise, we remain very confident in our commitment through '28. So at a high level that 25% to 28% remains intact. And I think it's too early in our planning process for specifics on '27, given some of the dynamics that we're seeing early in the year, we just wanted to provide some commentary and pull forward the conversation by about a quarter. So I would reiterate, confident in our ability to generate highly attractive earnings growth at the enterprise level next year in '27. I think a reasonable floor, Mike, for '27 for adjusted EPS should be -- could be $8.44, and that's obviously consistent with current consensus. it would imply an EPS growth rate for us of about 13% off of that adjusted baseline of $7.46. And just to remind you, the baseline reflects the midpoint of our updated EPS guide and then consistent with our guidance convention, it excludes prior year development in PYD and any prior year items in our individual exchange business, which we've exited. So one thing I think, Mike, also worth emphasizing is the strong cash flow generation of the enterprise. It was demonstrated again this quarter. We continue to strengthen our balance sheet. And as a reminder, we've only reflected the offset of dilution in our long-term expectations. So the expectations continue to be grounded in a guidance philosophy of establishing credible targets, delivering with disciplined execution and highlighting opportunities for outperformance. Prem, do you want to talk more about the dynamics within the business? Prem Shah: Yes. Thanks, Michael, for the question. Thanks, Brian. Just a couple of things, right? So we highlighted 2 pressures that we're seeing right now. One is from 340B and one is from the selling season. So on 340B, we're confident in our '26 guide for Health Services due to the broader strength across the business. I'll talk about that in a second. But we did experience some pressure from 340B in the quarter and now expect that to be a headwind as we go into next year. With respect to the selling season, recall, last year, we had an incredible selling season where our pipeline was very active. We had over $6 billion in new sales from last year -- or sorry, for this year, and that's meaningfully above our historical average. As we went into 2027, we took a disciplined and prudent approach to the selling season to ensure that we had the right underwriting and contracts in place for the new business and renewals that we had. And at this point in the year, we're trending to a retention rate that's slightly lower than our historical performance, but more consistent with industry norms. And I'd say the second part of the selling season that's dynamic at this point is really around how our health plans are handling the selling season and as our clients continue to assess the markets in which they operate, and that could also have implications on our membership. And your question on how we plan on offsetting it. Look, I think we have a tremendous specialty pharmacy business that continues to perform exceptionally well. When you talk to our PBM customers, they're focused on the things they've been focused on for many decades, what they expect out of us, which is how do we help them lower the cost of goods for the memberships that they serve. And so our specialty pharmacy business and specialty generic pipeline is areas in which we continue to have very high generic adherence as well as generic dispensing rates that's creating value for our customers. And secondly, we continue to create innovative solutions like Cordavis, where we launched a biosimilar, and that's generated over $1.8 billion of savings on just Humira for our customers. So we continue to be focused on our clients' needs. And last I checked, the industry, the brand trends and brand inflation continue to be really high. And so we're focused on managing the trend for our clients, reducing the cost for our clients. And we think by doing that, we'll continue to deliver value for our customers. And we really do believe the ability to maintain margins with historical levels is how we see this business in this industry. It's been durable over the long term, and we continue to believe that's the way this will be as we go forward. J. Joyner: Thank you, Brian and Prem, maybe just one additional comment. As Brian said, we pulled forward the headwinds and tailwinds. So I appreciate the question. But I think the theme you're going to hear from us is going to continue to be around the tremendous momentum we have across CVS Health. And I just want to reinforce a couple of thoughts here. One is we took the right steps at Aetna. You see the results as they're coming through. So this is our second consecutive year of strong performance -- we've talked about the strong performance in our retail business. So the deliberate and intentional investments that we've made both in our colleagues and technology and our pricing model has continued to make us the best national pharmacy in the country. The tailwinds on the [ PS ] business is our specialty. So as Prem said, we're running the best specialty pharmacy in the country and like the tailwinds and the trajectory of that business. What we haven't talked about is the investments in technology and AI specifically, which is allowing us to focus on the things that are creating friction in the marketplace, and we're trying to improve the health care experience. So a big push and a big investment in that area. The GLP-1s, we're really proud of the fact that we're able to serve that market in multiple ways, both whether it be in the pharmacy benefit and/or Aetna business, managing the underlying cost and/or serving the consumer in a cash or unfunded marketplace and the relationships that we're announcing with the manufacturers are allowing us to be a leader in that space. As Brian mentioned, we have a strong balance sheet, continue to make progress in terms of strengthening and positioning ourselves in terms of creating a more disciplined capital deployment model. So overall, I would say we definitely wanted to pull forward the headwinds, tailwinds early. But again, talking about the fact that we have some pressure in our PBM at the moment is more than offset by the strength that we have across the enterprise. So again, thanks for the question. And next question, please. Operator: Our next question comes from Lisa Gill with JPMorgan. Lisa Gill: Just really want to follow up on the health benefits side of your business. Obviously, very strong performance in the quarter. Just had a couple of questions here. One, can you maybe just talk about what you're seeing in the underlying trend? You mentioned that Medicare Advantage was better. But as we think about what Brian talked about for 2027, just your thoughts on the way that you bid for MA in '27, thoughts on Medicare Part D in '27 and how you see that playing out? And then, David, just on your comments on GLP-1s, can this be a meaningful component to growth over time? Or is this just taking all the elements of what CVS has to offer and bringing it to the market? J. Joyner: Yes. So thanks, Lisa, for the question. I'll have Steve talk specifically to the healthcare benefits business and Medicare and Part D, and then I'll come back on the GLP-1. Steven Nelson: Thanks, Lisa, for the question. Look, I'm going to start with just Aetna overall, just to give you a perspective. We have a great team executing at a high level, really encouraged about the progress across all 3 businesses, Medicaid is in line, rate advocacy execution. Our commercial business has been strong, remains strong, seeing growth in a highly disciplined pricing environment. And then our Medicare business, as you asked specifically about, is ahead of our expectations. So look, really pleased with the performance across the entire Aetna and the progress that we're making over the last couple of years. Specifically on Medicare, as I -- before I comment on kind of whatever I can on 2027, it's a little early to be specific, but let me give you a little context on the performance in '26 because I think it will help you understand some of my commentary around '27. But as we've laid down the foundation for this business over the last couple of years, we've made tremendous progress in the geographic footprint, our product mix, our ability to execute during AEP, and we've taken a lot of discipline into both previous bid cycles. And so that is playing out in 2026. We've seen less contraction in our membership than we expected. favorable member mix. We have leading star scores. So it's all really coming together. Our strong medical cost management approach has really been producing some really strong momentum in this business for 2026, and we expect that to continue. As I think about '27, as we contemplated the bids, we're taking that same focus to return the business to target margins and the same discipline. We assumed a continuation of the elevated trend as we put our bids in. And we think this business, combined with our leading star scores is going to be well positioned to make that continued progress towards the appropriate margins in '27, but also delivering a great experience and good health outcomes for our members. So very encouraged about the individual Medicare Advantage business. I'm just going to -- before I comment on Part D, just highlight group Medicare Advantage, too, because that has contributed meaningfully to the progress. Now with 2027 pricing in, we have renewed about 75% of our book. And so good progress there, and that's contributing to the return to target margin. On Part D specifically, that business is operating, performing in line with our expectations. We took deliberate actions over the past couple of years to I'd say, derisk that and simplify our product portfolio. And we contemplated that same approach and took that same discipline into our 2027 bid. So overall, really encouraged by the progress. The momentum is going to continue. We will make progress -- continued progress in 2027 as well. J. Joyner: Yes. Thanks, Steve. And Lisa, with the 2-parter, it may be a little lengthy response here, but let me give you the context for GLP-1. And I think we all know that GLP-1s serve the diabetes market. It remains a funded benefit for most all -- if all of our customers at the moment. And the question that we're dealing with is where we think the obesity category is headed. So that's why we continue to emphasize the fact that we can capture the GLP-1 volumes in our funded programs with Caremark and Aetna and help manage the underlying cost. At the same time, we see a lot of movement back into the cash or the unfunded marketplace, which is why we're emphasizing the ability to support in our direct-to-consumer platform, the ability to serve both the Lilly and Novo products in that market. So Prem, maybe you want to just give a little bit of color on kind of how we're thinking about GLP-1s and the impact it will have across your business. Prem Shah: Yes. Just to add to what David said, I'd say a few things. First off, on the Caremark side, GLP-1s continues to be a trend driver and a challenging category for our customers. So as we announced in May, we're expanding our formulary options again for GLP-1s while continuing to drive savings in the category for our funded customers. When you think about the open market, as David alluded to, I would say we may have been slightly slow to enter the cash paying market or direct-to-patient market. And we've kind of repivoted that program over the course of this year, and we're really proud of where we landed. So first off, from a MinuteClinic perspective, we launched a new weight management offering in Q2 at $49 per visit. We're announcing now that we're going to reduce the price of those weight management offering or weight management visits to $29 as we go forward. And secondly, and those visits are available 24/7 across the country or in our hundreds of MinuteClinics that we have across the country. So you can get access to that in either way. And secondly, we're excited about our partnership, as David mentioned, both with Lilly with our new announcement to take care of more patients in the cash market as well as our Novo product offering that we have there. So we continue to be able to serve all FDA-approved products. This is an opportunity that we see in PCW that generated some of the strength that you saw in the quarter and as well as you'll see in the back half of this year, but it's a tremendous opportunity for us to create solutions that consumers are asking for and really leverage our 9,000 community pharmacy destinations and create it in a manner in which consumers ask us. So we're excited to bring this to market. We're excited about the opportunity it creates for our enterprise, but more importantly, the opportunity it creates to create access across the country. Operator: Our next question comes from Justin Lake with Wolfe Research. Justin Lake: First, a quick follow-up on '27. Is there any share repo or other capital deployment assumed in that [ $8.44 ] -- or is that still outside the guide similar to the Investor Day framework? And then my question is around the retail business strength. We know you're benefiting at the moment from script share gains from Rite Aid and others that might normalize over time. So I'm curious on your thoughts of the sustainability of the strong PCW growth as share gains might normalize going forward. Maybe you can give us an update on the cost-plus rollout, how you're seeing your ability to stabilize gross margins per script into '27 and beyond and any other dynamics we should consider? J. Joyner: All right. Perfect. Thank you, Justin. So Brian, can you answer the share repo question and then turn it over to Prem for the color on the durability and strength of retail. Brian Newman: Sure, David. And thanks, Justin. Similar to what we talked about at Investor Day, we are only assuming offsetting dilution in '27, Justin. So nothing beyond that at this point. And obviously, you heard cash is improving. So Prem, you want to fill in the rest of the color? Prem Shah: Yes. Thanks, Justin. So proud to report that we're still the best run national pharmacy in the country, and I'm really proud of the strong results that we've had. And if you take a step back and you recall the multiyear journey we've had here, it's really been a 3-pronged approach. It started with one, we had to fix our service in our stores. And I'm proud to report we have the best NPS levels that we've seen in many, many years, powered by our technology, the solutions that we put in place, leveraging AI and leveraging what I'd say is better consumer experiences through our digital applications. And then number two, how do we empower our colleagues in our store to do more. And so we continue to leverage our 30,000 pharmacists to continue to provide clinical services across our stores. Secondly, as you said, it was all about how do we kind of reduce or slow down the headwind we had from reimbursement pressure and how do we solve the reimbursement problem we had in this business. And if you go back a couple of years, we launched CVS [ CostVantage ], our cost-based pricing into the market, and it was really intended to drive more sustainable pharmacy reimbursement in the country and help us align better with payers with the value we're creating as a local community pharmacy. If you take a step back from that and you think about what it is that we give to payers, first and foremost, it's our industry-leading cost of goods that we pass through them, and we continue to drive improvement for them for our payer partners. And they benefited from this industry-leading cost of goods in a quicker way in terms of the way that [ CostVantage ] works. This is also helping us get to a more consistent margin profile in this business. And as you look at 2026, we took a prudent approach to how we thought about this, and we're excited about the encouraging progress that we're making relative to our expectations. Lastly, as you said, we've always driven script growth in this business above market levels. Obviously, the Rite Aid was an incremental tailwind as you think about this year and the first half of this year. But our expectations for the business is that we'll continue to create unique solutions that customers want with high service levels that allow us to grow faster than the market as it relates to this business. And lastly, when we do that, we also create incremental operating leverage across our 9,000 stores that we have. And lastly, I'd be remiss not to mention, we also had strong front store sales growth with about 100 basis points of front store sales growth midst of what I'd say is a challenging macro environment. So all in, this business continues to perform really well. The service levels are really strong. And I'd say the strategy we put in a few years ago, we're starting to see the fruits of that strategy. Operator: Our next question comes from Stephen Baxter with Wells Fargo. Stephen Baxter: I was hoping to get an update on the performance of the commercial risk business. Can you update us on how the margins in your guidance this year compared to what you target long term? And then additionally, how the -- no Surprises Act and independent dispute resolution process is impacting your cost trend and margins this year and maybe some context on how that compares to what you saw last year. J. Joyner: All right, Stephen, thank you. Thanks for the question. So Steve, do you want to take that? Steven Nelson: Sure. Look, our commercial business has been a strong performer, another good quarter for it, and it will continue to be strong. It's in line with our expectations. And look, we saw elevated trends early back in 2024. And so we price for that. And so we feel like we have a good forecasting models, and we've been able to use pricing discipline there. Despite the pricing discipline, we've seen strong growth across commercial and both our fully insured small business, but also our self-insured. And so that means that our innovative products, services, capabilities are clearly resonating. We're bringing industry-leading technology solutions, both on our website and our Aetna Health app, along with the opportunity to combine our offerings with Caremark. This creates really powerful solutions to our customers. And so that's resonating in the market and really like our position there. And look, we're going to continue to lean into innovation and bringing solutions to our customers in this high trend environment. It's frustrating to them, and we think we offer unique and distinctive solutions. With respect to IDR, look, this is one component of trend. We've seen it. We've been watching it. We've accounted for it. So it's not catching us off guard. And we've taken actions. We've gone upstream with providers trying to bring certain providers into the network at reasonable rates so we can get ahead of this dispute resolution. When we do have a dispute, we're resolving it more quickly and appropriately. But as others have called out, it is definitely not playing out as intended. No Surprises Act was put in for a reason to keep patients out of the middle and literally not surprise them. So we support that, but the dispute resolution process is clearly being abused by a small group of players. And so we look forward to working with the administration and state regulators to resolve this because our -- particularly our self-funded employers are very frustrated with this. And so we need to work together to rectify this. Operator: Our next question comes from Erin Wright with Morgan Stanley. Erin Wilson Wright: Great. Can you speak to the timing and magnitude of the technology investments, how we should think about the cadence of those investments, but also just for the balance of the year, but also into 2027? And can you talk about that multipronged approach? You talked a little bit about some of that in the last question, but around AI and how you are an adopter as well as an enabler, how this could bring both cost saves and revenue opportunities for you and how material those will be over the near and medium term? J. Joyner: Yes. Erin, thanks for the question. And obviously, a really important part of our strategy and direction as a broader enterprise. So I may have multiple people speak to what -- how we're thinking about technology and AI, and then Brian will obviously cover the financial benefits that we expect to achieve. So we believe we're at an inflection point. AI and technology is moving in a way that we believe we're moving from a consumer-based health care company to a consumer-based health care technology business. And we think the technology is going to be at the center of the core of our differentiation and our value proposition. So we're going to be very clear, though, given some of the concerns around AI is we're going to be very focused about where we will and where we will not deploy AI. And you'll see that our model is going to be anchored very much in the human touch and protecting the privacy of the people in which we serve. So that will become the North Star for our business. That said, we also made a commitment a year ago that we were going to invest $20-plus billion in our technology efforts over the next decade. And this is going to be a very deliberate, and this is the consistent word you're hearing a very responsible and deliberate process in terms of where we expect to get the appropriate ROI and the use cases that will help improve the experience and our ability to serve our customers. So I'm going to have -- Steve, maybe you can speak a little bit about the Aetna technology strategy. Prem will then follow up, and then Brian will close with the financials. Steven Nelson: Great. Thanks, David. Look, I'm going to highlight 4 ways that we're deploying AI. And I'll just say I echo what David said about being thoughtful and responsible, but yet very excited about the change, I think this is going to bring to our industry and the experience that we're trying to offer our members. But first, of course, we're deploying AI to create a more efficient faster, more accurate environment, particularly related to our claims payment and some of the transactional work that we do. David mentioned the Claims Assistant Manager, which is revolutionizing how we provide payments more accurate and more timely to providers, which is really important. And we're also using it to work towards a best-in-class cost structure. It's very important to this business as we move into a more efficient environment. So that's one area. The second is we're leaning into our colleague experience. This -- we think that AI, we can deploy it in a way that will create less friction for our own employees so they can better serve our members and spend more time with them, helping them navigate their health care journey. So our A1 -- our Aetna One advocates, for example, used to spend 90 minutes preparing and reviewing a case to help a member and now it takes them only 2 minutes. They can spend more time now with the member. And so this is really powerful. And then improving the member experience. We can now help them along their care pathway. We can actually use our AI agents to help schedule appointments, creating less administrative burden on everyone. And I could go on and on, but a lot of deployment there in our website and our app have both embedded AI capabilities that make it an industry-leading capability. So -- and then last, we are really leaning into our provider relationships and our provider experience in a more meaningful way than ever before. So we're utilizing these tools to help reimagine the prior auth process, for example, 83% of our prior authorizations are approved in real time and over 95% within 24 hours. And we're just utilizing and leaning into those tools to build trust with our providers. And it's working. We have more work to do, but really encouraged by the early results of the application of AI across these 4 domains. Prem Shah: Yes. And Erin, maybe I'll just add a couple more comments. So first off, when you think about AI, there's 2 things that we're really focused on. One is how do you improve clinical quality. And so when you look across our pharmacy assets, -- in our specialty pharmacy, we have one of the most tech-enabled and AI-driven specialty pharmacies in the country. We're improving the adherence rates to over 90% of these drugs, which help lower the cost of these highly expensive drugs as well as improve the quality of care. Secondly, in our retail pharmacies, we leverage AI in our STARS programs to help improve adherence and other things as well there to have the operational and the clinical benefit as it relates to that. Secondly, provider burden or pharmacist burden in this country is very real, and this helps to free up time for them to serve patients better. Over the course of the last couple of years, we've removed hundreds of millions of calls out of our retail pharmacy business and transferred them into conversational AI. And this has allowed us to refocus 1 million hours of pharmacist hours to allow them to deliver better experiences and clinical care at the pharmacy counters. And as I mentioned in my prior answer, this also generates better service and better service generates better results for our pharmacy businesses. So it's a really good example of how we're delivering it. And then lastly, I'll say, we think we have a unique opportunity as we announced at Investor Day with Health100 to create a unique solution that integrates across any pharmacy, any provider, any PBM, et cetera, that we can bring into the marketplace that really allows all consumers across the country to benefit from the integration of what we're bringing together and what we can bring to market. So those are a few extra ways along with what Steve said in terms of how we're leveraging technology and AI. Brian, over to you. Brian Newman: Thanks, Prem. Thanks, Erin, for the question. I'll just wrap with a couple of thoughts. And as you heard from Steve and Prem, we're deploying AI across the enterprise. And ultimately, it's enabling us to serve consumers in what I think is a more effective and differentiated way. but it's also showing up as real improvements in our operations, and it's helping ensure we're best-in-class across the business segments. So over the last few years, as David said, we've generated actually some significant savings over $1 billion in OpEx savings reductions. And that's through the focus on both technology efficiencies and ultimately, AI. So we're committed to continue the investment across the businesses as I think about AI and emerging technologies, ultimately to improve the health of the consumers, and we'll keep you updated, but that's it. Operator: Next question comes from Andrew Mok with Barclays. Andrew Mok: I wanted to follow up on the 340B headwind. I believe this is the first time you've called this out since 2024. So I'd love to better understand what's driving the incremental pressure now? Is this driven by claims penetration, manufacturer contracting or reimbursement changes? And can you help us understand what's coming in better this year within HSS to offset the headwind? J. Joyner: All right. So Prem, I'll let you take the headwinds and Brian, you can cover the financials. Prem Shah: Yes, Andrew, thanks for the question. And if you take a step back, 340B is a critical program that supports care for underserved populations, and we have a long history of supporting the program and supporting health systems. And so if you think about the environment, it's a dynamic right now. Pharma manufacturers are imposing restrictions on covered entities that led to some of the impact that we're seeing in the second quarter. That was, as I said earlier, fully offset by broader Caremark performance. We're closely monitoring this environment, and we continue to work with CEs to navigate the program dynamics. There's also another dynamic as large specialty drugs become generic that creates a little bit of pressure in the program as well. So we continue to remain focused on supporting these health systems, ensuring the value we provide and ensuring that our clients continue to have the lowest possible net cost as we pass that through. So Brian, over to you for maybe a little bit more commentary. Brian Newman: Yes. Just a couple of thoughts. We continue to feel confident in our full year outlook for HS. However, as we discussed, we do expect 340B pressure to be a headwind next year. just like we offset it this year. We don't split out the various value pools in Caremark, but I've given you a floor from an EPS perspective for the enterprise for '27. And I think what I'd reiterate is we've got multiple paths to deliver on our commitments to the investors. So not commenting on 340B sizing specifically, but we're building up the plans as we go right now, and we'll come back to you in the fourth -- the third quarter call and give you some headwinds, tailwinds, and then we'll give you the detailed break on the fourth quarter call. J. Joyner: Thank you, Brian. Operator, last question, please. Operator: Our last question comes from Elizabeth Anderson with Evercore ISI. Elizabeth Anderson: You had talked a lot about the value creation activities being pulled forward in the first half of the year. I know you talked about a little bit about the technology side, but anything you can talk about in terms of like what that was operationally? And does that give you a little bit more space to do additional things that you hadn't contemplated in the back half of the year? Or are you sort of thinking about that sort of the right place to be and sort of think about more of those as opportunities for 2027? J. Joyner: Yes. Okay. Elizabeth, I'm going to have Brian kind of speak a little bit about the timing of -- and the performance this year. I just make sure I have -- understand the question correctly. Is it about the technology and cost takeout? Or is it the investments in some of the innovation? Elizabeth Anderson: Both. J. Joyner: Okay. All right. So Brian, do you want to just take the timing? Brian Newman: Yes. We had some investments in capabilities and technology, and that continues. We have it across our business segments. We've been investing in colleagues and capabilities at PCW for some time, and we think we're seeing the fruits of that labor. We continue to do it. You saw some of it pop up in the corporate segment this past quarter. So net-net, we feel good about the investments we're making. To go along with the theme of the disciplined capital management, Elizabeth, I think we feel very confident about where we're investing the dollars and tracking the returns on them. So you'll continue to see investments in the business, but that's captured in the full year beat and raise. And obviously, we put a floor on '27. So we have the investments currently that we've modeled in there. J. Joyner: Yes. Thanks, Brian. And maybe just one last comment on technology in general. I think Steve and Prem did a nice job of how we're prioritizing and the results that we're seeing. But I think you're going to see us balance 2 parts of technology and AI. One is the efficiencies and the productivity that we spoke to, but equally as important is the growth aspect of the investments that we're making. So that's why we're leaning in heavily to the consumer-based health care technology business, the innovations that we're driving and the growth that we expect, in large part, seeing some of this come through even in the early signs of where we expect Health100 to ultimately grow and impact health care in this country. So thanks for the question. And this is, again, a great quarter. I want to thank the management team for a continued strong and excellent performance and focus on our business. I also want to thank our colleagues for the hard work that they do every day. Their dedication to the consumers and it's basically the foundation of everything that we discussed today. Very proud of the progress we've made so far this year, but even more excited about the opportunities ahead. So thank you for joining the call, and we'll see you next quarter. Operator: Thank you for joining CVS Health's Second Quarter 2026 Earnings Call. This concludes today's conference call. You may now disconnect. Before you buy stock in CVS Health, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CVS Health wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy. CVS Health (CVS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

UnitedHealth Group Incorporated’s UNH second-quarter results show that its earnings performance is improving. The medical care ratio (MCR) fell to 86.7% from 89.4% a year ago, meaning the company spent less of its premium revenues on medical care and retained more for profits. This helped operating earnings rise 55%. UNH also raised its 2026 adjusted EPS guidance, reflecting confidence in its earnings recovery. The trend is encouraging, particularly in Medicare. Medical costs are running below UNH’s original expectations, aided by better benefit planning, care management and changes in provider networks. OptumHealth is also making progress as it focuses more on value-based care and controls unnecessary medical spending. These trends suggest that the company’s cost-control efforts are beginning to show results. Still, the 86.7% MCR may not fully reflect UNH’s underlying medical-cost trend. The quarter included $860 million of favorable prior-period medical development. At the same time, commercial medical costs are increasing at a rate exceeding 11%, caused by higher provider billing and coding intensity and specialty drug costs. This could keep pressure on commercial margins for longer. UNH’s earnings rebound looks encouraging, but its durability remains the key issue. The company’s 2027 pricing and benefit decisions will be an important test. If the company can maintain pricing growth in line with rising medical costs, margin expansion could drive further earnings growth. Otherwise, sustained medical-cost pressure may constrain future earnings growth. UnitedHealth isn't alone; peers from the Medical space, including Elevance Health, Inc. ELV and CVS Health Corporation CVS, are also navigating changing medical cost trends. Elevance Health’s second-quarter benefit expense ratio was 89.7%, up 80 basis points year over year, mainly due to higher medical costs in its government businesses. Still, ELV raised its 2026 adjusted EPS guidance to at least $27. This shows Elevance is using pricing and cost controls to protect margins. CVS Health is showing encouraging cost-control trends. Its Aetna business benefited from lower medical costs in the second quarter, helping the company deliver strong earnings beat and raise its 2026 adjusted EPS guidance to $7.90-$8.10. However, CVS faces uncertainty heading into 2027 due to ongoing PBM and 340B-related pressures. Shares of UnitedHealth have risen 47.9% in the past 12 months compared with the industry’s 41% growth. Image Source: Zacks Investment Research From a valuation standpoint, UNH trades at a forward price-to-earnings ratio of 18.83X compared with the industry average of 16.48X. UNH carries a Value Scoreof B. Image Source: Zacks Investment Research The Zacks Consensus Estimate for UnitedHealth’s 2026 earnings is pegged at $19.69 per share, implying a 20.4% increase from the year-ago period’s level. Image Source: Zacks Investment Research UNH currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 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 UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report CVS Health Corporation (CVS) : Free Stock Analysis Report Elevance Health, Inc. (ELV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Fluent, Inc.? Here are five stocks we like better. Commerce Media Solutions drove Fluent’s growth, with revenue up 90% year over year to $30.5 million, or 63% of consolidated revenue. Total revenue rose 8% to $48.4 million, while continuing-business revenue increased 25%. Profitability improved but remained negative: gross margin expanded to 28.9%, adjusted EBITDA loss narrowed to $1.8 million, and net loss declined to $6.2 million. Management expects positive adjusted EBITDA in the fourth quarter. Fluent expanded its commerce-media pipeline through partnerships with CVS, Bilt Technologies and Beyond, with in-store commerce-media initiatives expected to begin contributing meaningfully in 2027. The company reiterated its full-year outlook for double-digit continuing-business revenue growth, despite cash declining to $6.9 million at quarter-end. Fluent (NASDAQ:FLNT) reported second-quarter 2026 revenue growth as its Commerce Media Solutions business expanded sharply and became a larger share of the company’s overall mix. Management said the quarter marked a milestone in the company’s strategic shift toward commerce media, while maintaining its full-year expectations for double-digit revenue growth from aggregate continuing businesses and improved adjusted EBITDA. Total consolidated revenue was $48.4 million for the quarter, up 8% from $44.7 million a year earlier. On an aggregate continuing-business basis, excluding the effects of the Call Solutions divestiture and other divested or run-off revenue, revenue increased 25% year over year. → MarketBeat Week in Review – 08/03 - 08/07 “Commerce Media continues to be the lead story of our company,” Chief Executive Officer Don Patrick said, pointing to growth in online post-transaction offerings and the company’s planned expansion into in-store commerce media. Commerce Media Solutions revenue rose 90% year over year to $30.5 million, representing 63% of consolidated revenue, compared with 36% in the prior-year period. Patrick said the segment has now posted its 10th consecutive quarter of high-double-digit to triple-digit growth and ended the quarter with an annual revenue run rate above $125 million. → Quantum Earnings Week: Winners and Losers Are Finally Emerging By comparison, revenue from Fluent’s Owned and Operated business declined 24% to $16.3 million from $21.4 million a year earlier. Chief Financial Officer Ryan Perfit said the company does not yet have sufficient visibility to characterize the Owned and Operated business as stable over the long term, though it remained flat sequentially during the quarter and its margins improved. Management described the Owned and Operated platform as a strategic asset that supports Fluent’s commerce-media efforts. Patrick said it allows the company to conduct tests quickly, use results to inform its artificial-intelligence models and creative approaches, and leverage first-party data and advertiser campaign data. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War In response to an analyst question, Patrick said a case study published on Fluent’s website showed the company generating nearly 30% more revenue for supply partners and close to a 30% improvement in customer lifetime value compared with its largest competitor. He said those results were representative across customers rather than an anomaly. Gross profit increased 36% year over year to $14 million, equal to 28.9% of revenue and a 650-basis-point improvement from the first quarter. Perfit said improved monetization and increased scale with certain media partners, particularly those not operating under revenue-sharing agreements, helped drive the margin improvement. Commerce Media Solutions generated media margin of $10.5 million, or 34% of segment revenue, compared with $3.2 million, or 20%, in the prior-year quarter. Segment gross profit rose 186% to $8.2 million and represented 27% of Commerce Media Solutions revenue. Perfit said Fluent expects Commerce Media Solutions margins to remain in the mid-20% range and potentially improve to the upper 20% range over time. He said the company will continue to invest in new opportunities that may initially carry lower margins while Fluent works to optimize monetization. Media margin totaled $17.5 million, or 36% of revenue, compared with $11.9 million, or 26.7% of revenue, a year earlier. Total operating expenses were $17.3 million, up from $14.9 million, primarily due to higher incentive-based compensation. Net loss narrowed to $6.2 million from $7.2 million in the prior-year period. Adjusted net loss was $4.2 million, or $0.13 per share, compared with $5.8 million, or $0.24 per share, a year earlier. Adjusted EBITDA loss improved to approximately $1.8 million from a $2.8 million loss in the prior-year quarter. Perfit said Fluent expects continued adjusted EBITDA improvement through the year and expects a positive adjusted EBITDA result in the fourth quarter, aided by seasonal factors. The company did not provide specific third-quarter financial guidance. Fluent said CVS selected the company as a commerce-media partner and came online in the third quarter. Patrick called CVS one of Fluent’s largest partner wins and said the relationship expands Fluent into the retail pharmacy category while adding a new audience for its advertiser base. The initial CVS integration is a post-transaction implementation in which Fluent’s advertising technology and module are placed within CVS’ post-transaction site. Patrick said the technical integration is similar to other Fluent partner integrations and that the partnership was live and scaling as planned. Management also sees a potential path for CVS to participate in Fluent’s in-store offering in 2027. Patrick said the company’s roadmap with CVS includes both online post-transaction commerce media and in-store capabilities. Separately, Fluent announced an in-store commerce-media partnership with Bilt Technologies, a nationwide commerce and loyalty network that provides in-store point-of-sale systems for retailers. The offering is scheduled to launch later in 2026 with Beyond Inc., the operator of Bed Bath & Beyond, buybuy BABY and The Container Store. Patrick said Fluent does not expect meaningful financial contributions from in-store during 2026. The company plans to use the second half to test consumer experiences, measurement and advertiser return on ad spend, with an expectation of material revenue impact beginning in 2027 if the model is validated at scale. Management said loyalty data will be central to connecting online and physical-store activity. Patrick said the goal is to build a single commerce platform that can recognize and engage shoppers whether they transact digitally or at a physical register. He added that Fluent has additional in-store partners prepared for rollout in 2027 but did not identify them. Fluent reiterated its expectation for double-digit consolidated revenue growth on an aggregate continuing-business basis for full-year 2026. Perfit said Commerce Media Solutions is expected to continue growing at a high-double-digit rate and increase as a share of total revenue. The company reported $6.9 million in cash and cash equivalents as of June 30, down from $12.9 million at the end of 2025. Accounts receivable declined to $39.4 million from $48.7 million, while total assets were $75.1 million. Fluent generated approximately $300,000 in operating cash flow during the first half and reduced short-term debt to $26.8 million from $30.8 million at year-end. Perfit said liquidity remains supported by the company’s accounts-receivable financing facility and that Fluent remains focused on improving free cash flow and liquidity as Commerce Media Solutions scales. Patrick said management had not seen meaningful changes in consumer spending trends, though the company is monitoring the environment closely. Fluent, Inc is a performance marketing and customer acquisition platform that helps consumer brands drive leads and sales through data-driven digital campaigns. The company specializes in direct-response marketing, executing campaigns across multiple channels including email, display, paid search, social media and native advertising. By focusing on measurable outcomes such as cost per acquisition and return on ad spend, Fluent tailors solutions to meet the specific objectives of its clients. The company's proprietary technology leverages first-party data sourced from its network of consumer-facing digital properties and programmatic partnerships. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Fluent Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

CVS Health Corporation CVS used its Q2 2026 earnings call to pair stronger 2026 expectations with an early warning about pharmacy-services pressure next year. Management emphasized Aetna’s recovery and retail execution. Adjusted EPS of $2.58 topped the Zacks Consensus Estimate of $1.87, while revenues of $106.1 billion exceeded the $100.18 billion consensus estimate. CVS Health Corporation price-consensus-eps-surprise-chart | CVS Health Corporation Quote Chairman and chief executive officer David Joyner said every operating segment grew earnings and exceeded internal expectations. CVS raised adjusted earnings guidance to $7.9-$8.1. Chief financial officer Brian Newman increased the revenue outlook to at least $414 billion and operating cash flow guidance to at least $11.5 billion. Enterprise adjusted operating income is now projected at $16.58-$16.92 billion. Health Care Benefits drove the revision. Its adjusted operating income outlook rose by more than $1 billion to $5.03-$5.37 billion, while the full-year medical benefit ratio is expected at 89.75%, plus or minus 25 basis points. Newman pulled forward preliminary 2027 commentary, calling adjusted earnings of at least $8.44 reasonable. That represents about 13% growth from a $7.46 baseline and assumes only dilution-offsetting repurchases. A Leerink analyst pressed management on 340B and Caremark’s selling season. Executive vice president and group president Prem Shah said retention is tracking below historical levels but closer to industry norms, while customer market exits will also reduce membership. A Barclays analyst asked what was driving 340B pressure. Shah cited manufacturer restrictions on covered entities and large specialty drugs becoming generic. Broader Caremark performance offset the pressure in the quarter, but management expects a headwind in 2027. Health Care Benefits produced $2.426 billion of adjusted operating income and an 87.4% medical benefit ratio. About $500 million, or 140 basis points, came from risk-adjustment changes and favorable prior-year development, though Newman said core performance still exceeded expectations. A JPMorgan analyst asked about 2027 Medicare bids. Aetna president Steven Nelson cited lower-than-expected membership contraction, strong star scores and disciplined medical-cost management. Group Medicare Advantage has renewed about 75% of its book. A Wolfe Research analyst questioned retail durability as Rite Aid-related prescription gains normalize. Shah said CVS CostVantage is helping move the business toward a more consistent margin profile, while improved service should support above-market prescription growth across 9,000 stores. Joyner framed GLP-1s as an enterprise opportunity spanning funded benefits through Aetna and Caremark and cash-pay access through CVS Pharmacy and MinuteClinic. Shah acknowledged CVS was slightly slow entering the direct-to-patient market but said the company has repositioned the offering. MinuteClinic weight-management visits are moving from $49 to $29, while cash-pay therapy access starts at $149 for eligible patients. Shah said the strategy contributed to Pharmacy and Consumer Wellness strength and should support the second half. Management also highlighted expanded formularies, Medicare Bridge and patient support from nearly 30,000 pharmacists. A Morgan Stanley analyst asked about technology spending and returns. Joyner said CVS is moving toward a consumer-based health care technology model while keeping human interaction and privacy central to deployment. Nelson said Aetna’s claims platform cuts processing time by more than 20%. AI reduced advocate case preparation from 90 minutes to two minutes, while 83% of prior authorizations are approved in real time and more than 95% within 24 hours. Shah said conversational AI removed hundreds of millions of pharmacy calls and redirected 1 million pharmacist hours toward patient care. Newman said technology and AI contributed to more than $1 billion of operating-expense savings. Management’s tone was confident on 2026 and candid about 2027 trade-offs. Executives emphasized pricing, contracting discipline and measured capital deployment rather than pursuing membership without adequate returns. The stated path combines Aetna margin recovery, retail execution, specialty pharmacy growth and technology investment while preparing for 340B pressure and Caremark membership declines. CVS carries a Zacks Rank #2 (Buy), with a Value Score of A, Momentum Score of A, Growth Score of B and a VGM Score of A. Zacks methodology views Rank #1 (Strong Buy) and 2 stocks with an A or B Style Score as having a more favorable near-term performance profile. You can see the complete list of today’s Zacks #1 Rank stocks here. The A VGM Score reflects strength across the combined style factors. The Zacks Rank can change as earnings estimates are revised following the reported results. 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 CVS Health Corporation (CVS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in CVS Health Corporation? Here are five stocks we like better. CVS Health exceeded second-quarter expectations, reporting $106 billion in revenue, adjusted EPS of $2.58 and adjusted operating income of $5.2 billion. The company raised its full-year 2026 adjusted EPS guidance to $7.90–$8.10 and operating cash flow outlook to at least $11.5 billion. The Health Care Benefits segment showed improving margins, supported by stronger Medicare performance and favorable risk-adjustment factors. CVS increased its full-year segment operating-income forecast by more than $1 billion, to $5.03–$5.37 billion. Pharmacy services and retail operations also posted growth, while CVS highlighted GLP-1 access and technology investments as strategic priorities. Management offered an early 2027 adjusted EPS view of at least $8.44 and maintained its target for mid-teens adjusted EPS compound annual growth through 2028. UnitedHealth Just Gave Wall Street a Clearer Turnaround Signal CVS Health (NYSE:CVS) reported second-quarter results that exceeded its expectations, citing earnings growth across all operating segments and raising its full-year outlook for adjusted earnings per share and operating cash flow. Chair and Chief Executive Officer David Joyner said the company generated adjusted operating income of $5.2 billion and adjusted earnings per share of $2.58 during the quarter. Revenue exceeded $106 billion, up more than 7% from the prior-year quarter, while adjusted operating income increased 35% and adjusted EPS rose more than 40%, Chief Financial Officer Brian Newman said. → 3 Drone Stocks That Should Soar After the Summer Slump Eli Lilly Wins Back CVS Health, Reverting Novo's Advantage The company raised its full-year 2026 adjusted EPS guidance by $0.60 to a range of $7.90 to $8.10. CVS also lifted its operating cash flow expectation by $2 billion to at least $11.5 billion, reflecting its updated earnings outlook and working-capital improvements. The company now expects at least $414 billion in full-year revenue and enterprise adjusted operating income of $16.58 billion to $16.92 billion. CVS’ Health Care Benefits segment, which includes Aetna, generated more than $37 billion in quarterly revenue, up over 3% from the prior year. Adjusted operating income was about $2.4 billion, while the medical benefit ratio was 87.4%. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 3 Healthcare Stocks Set to Benefit From the One Big Beautiful Bill Newman said results reflected continued margin recovery as well as approximately $500 million, or 140 basis points, of benefit from changes in the company’s individual exchange risk-adjustment position for the 2025 plan year and favorable prior-year development. Excluding those items, CVS said underlying performance still exceeded expectations, led by its Medicare business. Medical membership totaled roughly 26 million at quarter-end, flat sequentially and down approximately 700,000 from the prior year. The year-over-year decline primarily reflected CVS’ exit from the individual exchange business, partly offset by growth in commercial fee-based membership. → Jersey Mike's Serves Fresh Gains After IPO Stumble Steve Nelson, executive vice president of CVS Health and president of Aetna, said the company’s Medicare business has benefited from changes to its geographic footprint, product mix, annual enrollment execution, pricing discipline, favorable member mix and medical-cost management. Nelson said Aetna expects to continue progressing toward target margins in 2027. For the full year, CVS now expects Health Care Benefits adjusted operating income of $5.03 billion to $5.37 billion, an increase of more than $1 billion from its earlier forecast. It expects a full-year medical benefit ratio of 89.75%, plus or minus 25 basis points. The Health Services segment produced nearly $52 billion in revenue, up more than 11%, and adjusted operating income of more than $1.7 billion, up 10%. Revenue growth was driven by pharmacy drug mix and brand inflation, partly offset by pharmacy client price improvements. Newman said the segment benefited from improved purchasing economics, pharmacy mix and modest improvement in the health care delivery business. CVS also cited higher specialty generic penetration rates. However, the company experienced pressure in its 340B business, which it said remains subject to a changing environment. CVS also said some value originally expected in the second half was pulled forward into the second quarter. Prem Shah, executive vice president and group president of CVS Health, said restrictions imposed by pharmaceutical manufacturers on covered entities contributed to the 340B pressure. The company expects 340B to become a headwind in 2027, although management said it remains confident in its 2026 Health Services outlook. CVS expects Caremark membership to decline next year, citing a more disciplined approach to contract underwriting and renewals, as well as product actions and market exits by some health-plan customers. Shah said the company expects its specialty pharmacy business, including generic opportunities, to partially offset those pressures. The Pharmacy and Consumer Wellness segment reported nearly $34 billion in revenue and nearly $1.5 billion in adjusted operating income, with operating income rising more than 10% year over year. Same-store pharmacy sales increased approximately 3%, supported by a 7% increase in same-store prescription volume. Same-store front-store sales improved 100 basis points from the prior-year period. CVS raised its full-year Pharmacy and Consumer Wellness adjusted operating income expectation by $220 million to at least $6.4 billion. Newman said results were supported by core pharmacy strength and contributions from the Rite Aid transaction completed last year. Joyner highlighted CVS’ efforts to serve patients using GLP-1 therapies for weight loss through both benefit-plan and cash-pay channels. He said MinuteClinic’s virtual weight-management offering connects eligible patients with licensed clinicians for $29, while eligible patients may obtain GLP-1 therapies for as little as $149 through cash-pay options. CVS plans to expand a partnership with Eli Lilly later this year, allowing eligible Zepbound and Mounjaro patients to access cash-pay pricing for same-day pickup through the CVS Health app or stores. The company also has an existing relationship with Novo Nordisk to dispense oral and injectable Wegovy. Management also emphasized investments in artificial intelligence and technology. Joyner said CVS has committed to invest more than $20 billion in technology efforts over the next decade. The company said its AI-enabled Claims Assist Manager is expected to reduce claims-processing time by more than 20% and accelerate payment on hundreds of millions of claims annually. Newman said CVS has generated more than $1 billion in operating-expense savings over the last several years through technology efficiencies and AI. He said ongoing investments are incorporated into the company’s updated 2026 outlook and its preliminary expectations for 2027. CVS said it remains confident in its target of mid-teens adjusted EPS compound annual growth from 2025 through 2028. While it will provide formal 2027 guidance later, Newman said adjusted EPS of at least $8.44 appears reasonable based on current conditions. That would represent approximately 13% growth from an adjusted $7.46 baseline, which excludes prior-year development and prior-year items related to the individual exchange business CVS has exited. The company ended the quarter with approximately $2.7 billion of cash at the parent and unrestricted subsidiaries, a leverage ratio of about 3.5 times, and year-to-date operating cash flow of approximately $10.6 billion. CVS returned more than $1.7 billion to shareholders through dividends during the first half and said its outlook does not assume share repurchases this year. CVS Health Corporation is a diversified healthcare company that operates a large network of retail pharmacies, pharmacy benefit management services and health care solutions. Headquartered in Woonsocket, Rhode Island, the company traces its roots to the early 1960s and has grown into an integrated provider of prescription drugs, over‑the‑counter products, clinical services and health insurance offerings. Its operating model combines retail pharmacy locations and in‑store clinics with broader pharmacy and health plan capabilities. Key business activities include CVS Pharmacy retail operations, MinuteClinic walk‑in medical clinics and HealthHUB locations that offer expanded clinical services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "CVS Health Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: Over $106 billion in Q2 2026, an increase of over 7% year-over-year. Adjusted Operating Income: Approximately $5.2 billion, up 35% from the prior year quarter. Adjusted EPS: $2.58, a significant increase of over 40% year-over-year. Cash Flow from Operations: Year-to-date approximately $10.6 billion. Healthcare Benefits Segment Revenue: Over $37 billion, up over 3% year-over-year. Medical Membership: Approximately 26 million members, down 700,000 year-over-year. Healthcare Benefits Adjusted Operating Income: Approximately $2.4 billion. Medical Benefit Ratio (MBR): 87.4%, improved meaningfully from the prior year quarter. Health Services Segment Revenue: Nearly $52 billion, an increase of over 11% year-over-year. Health Services Adjusted Operating Income: Over $1.7 billion, up 10% year-over-year. Pharmacy and Consumer Wellness Segment Revenue: Nearly $34 billion, a slight increase from the prior year quarter. Same-Store Pharmacy Sales: Grew approximately 3%. Same-Store Prescription Volumes: Increased 7%. Same-Store Front Store Sales: Increased 100 basis points versus the prior year quarter. Pharmacy and Consumer Wellness Adjusted Operating Income: Nearly $1.5 billion, an increase of over 10% year-over-year. Full Year 2026 Adjusted EPS Guidance: Raised to a range of $7.90 to $8.10. Full Year 2026 Revenue Guidance: At least $414 billion. Full Year 2026 Cash Flow from Operations Guidance: At least $11.5 billion. Warning! GuruFocus has detected 10 Warning Signs with CVS. Is CVS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. CVS Health Corp (NYSE:CVS) delivered strong second-quarter results with all operating segments growing earnings, generating adjusted EPS of $2.58, a 40% increase year-over-year. The company raised its full-year 2026 adjusted EPS guidance by $0.60 to a range of $7.90-$8.10 and increased its cash flow from operations outlook by $2 billion to at least $11.5 billion. Aetna's margin recovery is progressing well, with over $2 billion in year-over-year adjusted operating income improvement in the first half of 2026, driven by strong medical cost management and disciplined pricing. The Pharmacy and Consumer Wellness segment delivered an exceptional quarter, with same-store prescription volumes up 7% and adjusted operating income up over 10%, driven by core pharmacy strength and contributions from the Rite Aid transaction. CVS Health Corp (NYSE:CVS) is strategically positioning itself in the GLP-1 market through partnerships with Eli Lilly and Novo Nordisk, offering affordable cash-pay options and leveraging its MinuteClinic and pharmacy network to capture growth. The company is making significant progress in its technology and AI initiatives, including the launch of its Health 100 platform and AI-powered assistant HIO, which are expected to drive efficiencies and enhance the consumer experience. CVS Health Corp (NYSE:CVS) expects a headwind in 2027 from continued pressure in its 340B business due to manufacturer restrictions and the dynamic environment for the program. The company anticipates membership declines in Caremark next year due to a deliberate approach to client renewals and the selling season, as well as product actions and market exits by some health plan customers. The transition to net cost price models in the PBM industry, accelerated by recent legislation and regulatory developments, is creating near-term earnings pressure and uncertainty. The company is facing challenges from the independent dispute resolution process under the No Surprises Act, which is being abused by a small group of players and is frustrating self-funded employers. CVS Health Corp (NYSE:CVS) is experiencing pressure from pharmacy reimbursement and regulatory-related price reductions on certain drugs, which partially offset revenue growth in its Pharmacy and Consumer Wellness segment. The company's 2027 outlook of at least $8.44 in adjusted EPS assumes only offsetting dilution from share repurchases, with no additional capital deployment, limiting potential upside from buybacks. Q: Can you provide more detail on the preliminary 2027 headwinds and tailwinds, particularly around Health Services, and how you plan to offset the 340B headwinds and Caremark membership declines?A: CEO David Joyner and CFO Brian Newman highlighted that while 2027 will see headwinds from 340B dynamics and Caremark membership declines due to a disciplined approach to client renewals and health plan market exits, the company remains confident in its mid-teens adjusted EPS CAGR from 2025-2028. They provided a "reasonable floor" for 2027 adjusted EPS of at least $8.44, implying ~13% growth off an adjusted baseline of $7.46. Prem Shah, President of Pharmacy and Consumer Wellness, noted that the specialty pharmacy business, including high generic adherence and innovative solutions like Cordavis (which generated over $1.8 billion in savings on Humira), will help offset these pressures. Q: What is driving the strong performance in the Health Benefits segment, and how are you thinking about Medicare Advantage and Part D bids for 2027?A: Steve Nelson, President of Aetna, stated that the segment's strong performance is driven by disciplined pricing, favorable member mix, leading Star scores, and strong medical cost management. For 2027, Aetna is taking the same disciplined approach to bids, assuming continuation of elevated trends, and is well-positioned to make continued progress toward target margins. He also noted that group Medicare Advantage has renewed about 75% of its book for 2027, and Part D is performing in line with expectations after deliberate actions to de-risk and simplify the product portfolio. Q: Can GLP-1s become a meaningful growth component for CVS, and how is the company capitalizing on this opportunity?A: CEO David Joyner explained that CVS is capturing GLP-1 volumes in funded programs through Caremark and Aetna while also serving the growing cash-pay market. Prem Shah detailed the company's direct-to-consumer platform, including MinuteClinic's 24/7 virtual weight management offering reduced to $29, and partnerships with Eli Lilly and Novo Nordisk to provide cash-pay pricing for same-day pickup. This multi-pronged approach leverages CVS's 9,000 community pharmacies and positions the company as a leader in affordability, access, and convenience for all FDA-approved GLP-1s. Q: Is there any share repurchase or other capital deployment assumed in the 2027 EPS floor of $8.44?A: CFO Brian Newman confirmed that, similar to the Investor Day framework, the 2027 outlook only assumes offsetting dilution and does not include any additional share repurchases. He noted that cash flow is improving, which will allow the company to evaluate capital deployment opportunities as its leverage position improves. Q: How sustainable is the strong Pharmacy and Consumer Wellness (PCW) growth, and can you update us on the cost-plus rollout and margin stabilization?A: Prem Shah highlighted the multi-year strategy of fixing store service (now at best NPS levels), empowering pharmacists, and launching CVS Cost Manager (cost-based pricing) to address reimbursement pressure. He noted that script growth remains above market levels, with the Rite Aid transaction providing an incremental tailwind. The company expects to continue growing faster than the market through unique solutions and high service levels, creating incremental operating leverage across its 9,000 stores. Front store sales also grew 100 basis points despite a challenging macro environment. Q: How is the commercial risk business performing, and what is the impact of the No Surprises Act and independent dispute resolution (IDR) process on cost trends?A: Steve Nelson stated that the commercial business is a strong performer, in line with expectations, with strong growth in both fully insured and self-insured segments due to innovative products and technology. Regarding IDR, he acknowledged it is a component of trend that is being watched and accounted for, but noted the dispute resolution process is "clearly being abused by a small group of players." Aetna is working upstream with providers to bring them into networks at reasonable rates and is looking forward to working with regulators to resolve the issue, as self-funded employers are frustrated with the process. Q: What is the timing and magnitude of technology and AI investments, and how will they drive cost savings and revenue opportunities?A: CEO David Joyner emphasized a shift toward becoming a "consumer-based healthcare technology business" with a $20+ billion investment commitment over the next decade. Steve Nelson highlighted four deployment areas: efficient claims processing, improved colleague experience (reducing case prep time from 90 minutes to 2 minutes), enhanced member experience, and reimagined provider interactions (83% of prior authorizations approved in real time). Prem Shah added that AI is improving clinical quality and reducing pharmacist burden, freeing up a million hours for patient care. CFO Brian Newman noted over $1 billion in OpEx savings already generated through these efforts. Q: What is driving the incremental 340B pressure, and how is it being offset within Health Services this year?A: Prem Shah explained that the 340B program is facing a dynamic environment as pharmaceutical manufacturers impose restrictions on covered entities, which impacted Q2 results. This was fully offset by broader Caremark outperformance, including higher specialty generic penetration rates. He also noted that as large specialty drugs become generic, it creates additional pressure. CFO Brian Newman reiterated confidence in the full-year Health Services outlook, with 340B expected to be a headwind in 2027, but the company has multiple paths to deliver on its commitments. Q: Can you elaborate on the value creation activities pulled forward in the first half of the year, and does this create space for additional opportunities in the back half?A: CFO Brian Newman explained that investments in capabilities and technology continue across business segments, with some costs appearing in the corporate segment in Q2. He stated that the company feels confident about where it is investing dollars and tracking returns, with these investments captured in the full-year guidance raise and the 2027 floor. CEO David Joyner added that the company is balancing technology investments between efficiency/productivity gains and growth-oriented initiatives, such as the Health 100 platform, which is showing early signs of success. For the complete transcript of the earnings call, please refer to the full earnings call transcript.