CVS Health Corp. has raised its 2025 earnings forecast, surpassing Wall Street’s expectations, following a strong first quarter assisted by enhanced Medicare benefits. The health care conglomerate announced on Thursday that it benefited from improved star ratings for its Medicare Advantage plans, a private alternative to federal Medicare coverage.
In recent months, CVS Health and many other health insurers have grappled with mounting expenses related to their Medicare Advantage customers. This announcement arrives shortly after competitor UnitedHealth revised its 2025 outlook downward due to an unexpectedly sharp rise in care utilization.
For the first quarter, CVS Health reported adjusted earnings of $2.25 per share, as profit surged 60% to $1.78 billion. The company’s total revenue rose by 7% to $94.59 billion, while analysts had projected earnings of $1.70 per share on revenues of $93.66 billion, according to FactSet.
Looking ahead, CVS Health has adjusted its full-year earnings outlook, now forecasting between $6 to $6.20 per share. Initially, in February, the company predicted adjusted earnings to range from $5.75 to $6 per share; analysts predicted $5.92.
The unexpected increase in forecast early in the year was noted by Leerink Partners analyst Michael Cherny, who mentioned in a note that positive results were observed across all of CVS Health’s business segments.
Headquartered in Woonsocket, Rhode Island, CVS Health operates one of the largest drugstore chains in the United States and runs a significant pharmacy benefit management business, managing prescription drug coverage for employers, insurers, and other large clientele. Its Aetna insurance division currently serves 27 million people.
Additionally, on Thursday, the company announced its decision to withdraw from the Affordable Care Act’s (ACA) individual marketplaces next year. Currently, CVS covers approximately a million individuals within this market across 17 states. CEO David Joyner informed analysts that after dealing with “continued underperformance,” there was no foreseeable or long-term pathway to improving this segment. It’s noteworthy that Aetna exited the ACA marketplace in 2017 and later reentered.
The market reacted favorably to this news, with CVS Health shares climbing over 8% to $72.14 at the start of trading on Thursday, while broader market indexes experienced slight increases. The company’s stock has already risen by more than 48% in 2025, recovering from a drop of over 40% in the previous year, which was marked by multiple guideline reductions and the resignation of former CEO Karen Lynch.