CVS 2Q26 Preview: Trends Look Positive; Commercial MLR and Valuation Now the Key Debates

Research evidence excerpt

CVS 2Q26 Preview: Trends Look Positive; Commercial MLR and Valuation Now the Key Debates

Global Research

23 July 2026ab

CVS Health Corp Equities

AmericasCVS 2Q26 Preview: Trends Look Positive;

Commercial MLR and Valuation Now the Key Healthcare Providers

12-month rating BuyDebates

12m price target US$122.00

Prior : US$115.00

Modest tweaks to 2Q26E EPS; investor debate centers on upside to FY26 guide Price (23 Jul 2026) US$106.37

and appropriate multiple

RIC: CVS.N BBG: CVS US

UBS Call: We see likely upside in 2Q26 (vs. our/Visible Alpha consensus EPS of

$1.83/$1.84) and raised guidance - the question is where the guide lands vs. the Trading data and key metrics

buy side's ~$8/share (based on our conversations) in FY26. We would expect 52-wk range US$110.60-58.75

management to raise the guide by any 2Q beat given management's overall Market cap. US$136b

conservative nature, but we could see upside in both HSS and HCB. Shares o/s 1,277m (COM)

For 2Q, private PBM checks suggest HSS margins and pricing will continue to show Free float 69%

stable growth. Despite investor questions around commercial MLR risk following Avg. daily volume ('000) 2,290

UNH's 2Q26 IDR commentary, Aetna's limited membership footprint in Texas Avg. daily value (m) US$222.1

where ~40% of IDR disputes arise (per CMS) mitigates risk to HCB numbers and Common s/h equity (12/26E) US$81.8b

the impact of potential future liability. PCW guidance looks conservative after P/BV (12/26E) 1.7x

management only raised by the pharmacy beat in 1Q and includes an embedded Net debt to EBITDA (12/26E) 2.4x

assumption of deteriorating consumer demand which perhaps de-risks the macro

EPS (UBS, diluted) (USD)

setup, especially considering potential front-end benefit from world cup related-

12/26E

demand.