CVS Health reported second-quarter earnings for 2025 on July 31, showing total revenues of $98.9 billion, an increase of 8.4% year over year. The Health Care Benefits segment drove significant growth, with revenues rising 11.6% and adjusted operating income increasing by 39.4%, attributed to better medical cost management and operational execution at Aetna. This performance has raised CVS’s full-year guidance and resulted in a 2.3% increase in share price since the earnings release.
Even with the overall positive results, CVS is facing challenges in its Health Services segment and has recorded a $200 million downward revision in guidance due to underperformance in its Oak Street Health entity and elevated medical costs. Furthermore, a $470 million premium deficiency reserve was noted in the Group Medicare Advantage business.
CVS’s forward 12-month price-to-earnings (P/E) ratio stands at 9.44X, significantly lower than the S&P 500’s 22.39X, suggesting potential upside for investors despite mixed performance compared to its peers.
