If you’ve looked at your portfolio lately and seen CVS Health Corp stock, you might have winced. Honestly, 2024 and much of 2025 were rough. We’re talking about a company that basically had to reinvent itself while the wheels were still spinning. But as we sit here in early 2026, the vibe is shifting. It’s not just about selling bandages and soda anymore.
The market has been brutal to CVS. It’s no secret. Rising medical costs at Aetna and some messy leadership transitions made investors jumpy. But things are looking... different now. With David Joyner officially taking the reins as Chair of the Board this January, the "new" CVS is finally starting to show its face.
The Messy Reality of the Pivot
For a long time, CVS was just a pharmacy. Then it became an insurance giant. Then a primary care provider. Trying to do all three at once is like trying to juggle chainsaws while riding a unicycle. It’s impressive if you pull it off, but one slip and, well, you know.
Last year, the company had to eat a massive $5.7 billion "goodwill impairment" charge because Oak Street Health wasn't hitting the numbers fast enough. That hurt. Wall Street hates surprises, and that was a big one. But here is the thing: they are actually closing 16 underperforming Oak Street clinics in 2026.
It sounds bad, right? Closing locations?
Actually, it's the kind of discipline investors have been begging for. Instead of growing for the sake of growing, they are finally focused on sustainable margins. CFO Brian Newman has been pretty vocal about this—moving away from the "growth at all costs" mindset of the Karen Lynch era and back toward actual, predictable profit.
By the Numbers: Is the 2026 Guidance Real?
CVS recently dropped some bold numbers for 2026. They are projecting adjusted earnings per share (EPS) between $7.00 and $7.20. To put that in perspective, they’re aiming for mid-teens growth through 2028.
- Revenue Forecast: They’re looking at $400 billion plus. Yes, billion with a B.
- Cash Flow: Target is at least $10 billion in cash flow from operations for 2026.
- The Dividend: It’s still there, currently around $0.665 per quarter.
The "Medicare Advantage" problem is the elephant in the room. Everyone is struggling with it. Humana and UnitedHealth are feeling the pinch, too. But Aetna (CVS’s insurance arm) actually kept its Star Ratings high for 2026, with over 81% of members in 4-star plans or better. That is a huge win. It means they get more government moola than the guys who let their ratings slip.
What Most People Get Wrong About the Retail Business
You walk into a CVS and see $8 deodorant and a long line at the pharmacy. You think, "This business is dying."
You’re half right. The retail side is tough. Theft, labor costs, and Amazon Pharmacy are eating their lunch. But CVS knows this. That’s why they are leaning so hard into "Health Care Delivery."
They aren't just selling you a bottle of Tylenol; they want to be the person who prescribes it (Oak Street), the person who pays for it (Aetna), and the place where you pick it up. It’s a closed loop. If they can make it work, it's a cash machine. If they can’t, it’s a conglomerate mess.
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Right now, the "Moderate Buy" consensus from analysts suggests the market is starting to believe in the loop again. JPMorgan and Mizuho both hiked their price targets recently, with some eyes looking toward the $95 to $100 range. Not bad for a stock that was languishing in the $60s not too long ago.
The AI Wildcard
They are also talking a lot about an "AI-native" consumer platform. Usually, when a 60-year-old company talks about AI, I roll my eyes. It usually just means a crappy chatbot. But CVS is trying to use it to coordinate care between Signify Health (their home visit business) and their clinics. If they can use data to stop a Medicare patient from ending up in the ER, they save thousands of dollars. That is where the real money is hidden.
The Risks (Because Nothing is a Sure Thing)
Let's be real. Politics is the biggest shadow over CVS Health Corp stock. It's 2026, and healthcare reform is always a talking point. If the government decides to squeeze PBMs (Pharmacy Benefit Managers) even harder, CVS Caremark takes a hit.
Also, the Medical Care Ratio (MCR) is still hovering near 90%. That means for every dollar they take in for insurance premiums, 90 cents goes right back out to pay for doctors and hospitals. That is a razor-thin margin. If people keep using more healthcare than expected—which they have been—that $7.00 EPS target could vanish.
Actionable Insights for Investors
If you're looking at CVS, you aren't buying a tech rocket ship. You're buying a recovery story.
- Watch the Q4 Earnings: The call on January 27, 2026, will be the first real test of the Joyner/Newman era. Look for updates on those Oak Street closures.
- Monitor the MCR: If that 90% ratio doesn't start ticking down toward 88% or 87%, the stock will likely stay stuck.
- Dividend Reinvestment: For the "buy and hold" crowd, that ~3.4% yield is a nice cushion while you wait for the turnaround to actually manifest.
- The "Value Play" Factor: Compared to UnitedHealth, CVS is cheap. It's trading at a much lower multiple because of the recent drama. If they even halfway meet their 2026 goals, the "valuation gap" should close.
It isn't a sexy pick. It's a "boring company trying to fix its broken parts" pick. But sometimes, those are the ones that actually make you money when everyone else is looking the other way.
Next Steps: Review your exposure to the broader healthcare sector. If you are overweight in insurance but lacking in "delivery" (actual clinics), CVS offers a hybrid way to play both. Check the 10-K filing coming out in February to see the specific breakdown of the $2 billion cost-savings plan—that’s where the "hidden" earnings growth is supposed to come from.