CVS Health Projects Strong 2026 Earnings Amid Strategic Restructuring

CVS Health has projected an adjusted earnings per share (EPS) between $7.00 and $7.20 for 2026, slightly surpassing Wall Street's average estimate of $7.16. This announcement reflects the company's ongoing turnaround strategy under CEO David Joyner, which includes cost-cutting measures, market exits, and leadership restructuring.

The company also raised its 2025 adjusted EPS forecast to a range of $6.60 to $6.70, up from the previous $6.55 to $6.65. Total revenue for 2026 is expected to be at least $400 billion, below analysts' average estimate of $419.26 billion. Despite this, the focus on profitability and operational efficiency indicates a deliberate shift towards long-term value creation.

In October 2024, CVS Health announced plans to lay off approximately 2,900 employees, primarily in corporate roles, as part of a broader initiative to reduce expenses by $2 billion through operational streamlining and the implementation of artificial intelligence and automation. Additionally, the company decided to exit the individual Affordable Care Act (ACA) exchange business by 2026, allowing it to focus on its core strengths, such as Medicare Advantage, commercial plans, and Medicaid.

In the fourth quarter of 2024, CVS Health reported a net income of $1.64 billion ($1.30 per share), with adjusted earnings of $1.19 per share, surpassing analysts' expectations. Revenue reached $97.71 billion, exceeding the forecasted $97.06 billion. The company's shares have risen 70.5% in 2025, with a 2.4% increase to $78.38 in premarket trading following the announcement of the 2026 financial projections.

"We are closing out 2025 with meaningful momentum across our businesses and we expect another year of strong earnings growth in 2026," said Chief Financial Officer Brian Newman.

Analysts at Leerink Partners view CVS's performance as indicative of a strong recovery trajectory.

While the company's cost-cutting measures and market exits aim to enhance profitability, they also raise concerns about employment and access to healthcare services in certain communities. However, CVS Health's focus on enhancing healthcare delivery through initiatives like primary care services for Medicare patients and the integration of healthcare services within its retail locations aims to improve patient outcomes and accessibility.

CVS Health's proactive and strategic initiatives have not only revitalized its financial standing but also positioned the company as a resilient player in the evolving healthcare landscape. The projected growth for 2026 reflects a successful turnaround, balancing operational efficiency with a commitment to core healthcare services.