CVS Health Corporation CVS
CVS Health's Q2 2026 results validate the Aetna-led recovery—EPS jumped more than 40% and management raised 2026 guidance—but FY2025 fundamentals remain weak with a 0.44% net margin, $1.39 diluted EPS, and $93.6B of total debt. The stock has pulled back below its 50-day MA to $93.65 with RSI at 35.3 and a bearish MACD histogram, reflecting lingering concerns about medical cost trends and PBM regulatory risk.
Smart money scores are improving (0.1278 as of 2026-06-30, up from 0.0087 prior quarter) and the stock trades at a 33% P/S discount to the peer median, but the risk/reward is balanced until quarterly results confirm the margin inflection is sustainable.
What could go wrong
- Medical cost ratio deterioration. Aetna's Health Care Benefits profitability drove the Q2 2026 EPS jump, but any re-acceleration in medical utilization could reverse the improvement and pressure the raised 2026 outlook.
- Gross margin compression. Gross margin has declined from 17.84% in FY2021 to 13.77% in FY2025, a structural erosion that limits operating leverage even as revenue grows 7.85% YoY.
- Balance sheet leverage. Total debt of $93.6B against stockholders' equity of $75.2B as of FY2025 constrains financial flexibility and raises sensitivity to any further earnings shortfall.
- PBM regulatory overhang. Caremark faces ongoing regulatory scrutiny of PBM pricing practices; adverse legislative or rulemaking outcomes could pressure the Pharmacy Services segment.
What would change my mind
Where this comes from: FMP FY2025 annual + derived_metrics · FMP FY2025 annual · Zacks news article 2026-08-17 · Technicals as of 2026-08-19. Orin's read on CVS; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All CVS filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $8.6B | 0.2% of fund |
| Capital World Investors | $7.8B | 0.9% of fund |
| State Street | $6.2B | 0.2% of fund |
| Wellington Management Group Llp | $3.5B | 0.6% of fund |
| Geode Capital Management | $3.1B | 0.2% of fund |
| Fmr | $3.0B | 0.1% of fund |
131 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 96 Form 4 filings, net −$120.2M. Of the 50 on hand, 0 were open-market purchases and 1 a sale— the rest are grants, option exercises and tax withholding.
Ask Orin about CVS
Orin answers questions about CVS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 22.2× | 17.0× | 26.4× |
| EV/EBITDA | 12.9× | 11.6× | — |
| P/S | 0.26× | 0.28× | — |
| P/B | 1.4× | 1.3× | — |
Its P/E sits 60th percentile of its own last 5 years (−0.19σ from its own mean).
2.7%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $7.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$111
$92 – $123 · +27% against today's price
- 35 buy or overweight
- 6 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| CVSCVS Health Corporation | $109B | 22.2× | 12.9× | 14.2% | 1.2% | 6% |
| BMYBristol-Myers Squibb Company | $126B | 13.5× | 9.6× | 70.2% | 18.9% | 47% |
| CICigna Corporation | $70B | 10.9× | 8.1× | 11.7% | 2.3% | 15% |
| CORCencora, Inc. | $60B | 22.9× | 13.5× | 3.7% | 0.8% | 106% |
| ELVElevance Health Inc. | $86B | 17.7× | 13.4× | 39.0% | 2.5% | 11% |
| HCAHCA Healthcare, Inc. | $92B | 14.1× | 8.8× | 28.4% | 8.8% | -113% |
| HUMHumana Inc. | $46B | 35.7× | 17.3× | 13.7% | 0.9% | 7% |
| MCKMcKesson Corporation | $102B | 23.2× | 15.2× | 3.6% | 1.1% | -194% |
| MDTMedtronic plc | $113B | 21.6× | 14.8× | 66.7% | 13.9% | 11% |
| VRTXVertex Pharmaceuticals Incorporated | $133B | 30.2× | 23.6× | 86.0% | 34.9% | 23% |
The median is of the 9 peers listed above and nothing else — check it against the column. This company trades 2.6% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $369 | $97.39 · +279% | 2026-06-10 |
| Levered DCF | $264 | $97.39 · +171% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.