-- CVS Health (CVS) raised its full-year earnings outlook after reporting better-than-expected first-quarter results driven by improvement in its health-care benefits segment.
The company raised its 2026 adjusted earnings guidance to $7.30 to $7.50 a share from its previous projection of $7 to $7.20. The consensus on FactSet is $7.16.
"We are also updating our outlook for full-year cash flow from operations to at least $9.5 billion, reflecting improved underlying performance, primarily related to working capital in our health-care benefits segment," Chief Financial Officer Brian Newman said on the earnings call, according to a FactSet transcript.
The stock jumped 7.3% in Wednesday trading and has gained 9.1% this year.
CVS maintained its medical benefit ratio guidance, which represents the percentage of premiums spent on medical benefits.
"This outlook continues to maintain the same respectful and prudent view on medical cost trends until we have greater visibility into how those trends are developing in our pharmacy and consumer wellness segment," Newman said.
In the first quarter, adjusted EPS rose to $2.57 from $2.25 a year earlier as revenue climbed 6.2% to $100.43 billion. Wall Street expected EPS of $2.18 on revenue of $94.97 billion.
Sales in the health care benefits segment advanced 3.3% to $35.97 billion. "This increase was primarily driven by our government business, partially offset by our exit from the individual exchange business in 2026," Newman said.
Revenue in the health-services segment rose 11% to $48.24 billion, while pharmacy and consumer wellness was little changed at $31.99 billion.
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