CVS Health Partners With Wegovy Maker Novo Nordisk, Hikes 2025 Guidance

CVS Health Corp (NYSE:CVS) reported first-quarter sales of $94.59 billion on Thursday, beating the consensus of $93.64 billion.

Total revenues increased 7% year over year, driven by revenue growth across all segments.

CVS Health posted adjusted EPS of $2.25 for Q1, a sharp rise from $1.31 a year earlier and well above Wall Street's $1.70 estimate. The gain was primarily due to an increase in the Health Care Benefits segment's operating results, which reflects the favorable year-over-year impact of prior-year development and improved underlying performance in Medicare, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

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Adjusted operating income increased 54.9% to $4.58 billion, driven by increases across all operating segments.

Revenues in the Health Care Benefits segment increased 8% to $34.81 billion, primarily driven by increases in the Medicare product line, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

The Medical benefit ratio decreased from 90.4% to 87.3%, driven by the favorable year-over-year impact of prior-year development and improved underlying performance in Medicare, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

Medical membership as of March 31, 2025 of 27.1 million remained relatively consistent compared with December 31, 2024, reflecting membership declines in the individual exchange and Medicare product lines, which were largely offset by an increase in Commercial ASC membership.

Health Services segment (offering pharmacy benefit management) sales increased 7.9% to $43.46 billion, primarily driven by pharmacy drug mix, growth in specialty pharmacy, and brand inflation. These increases were partially offset by continued pharmacy client price improvements.

Pharmacy & Consumer Wellness segment sales increased 11.1% to $31.91 billion, primarily driven by pharmacy drug mix and increased prescription volume. These increases were partially offset by continued pharmacy reimbursement pressure.

Prescriptions filled increased by 4.3%, and Same-store prescription volume increased by 6.7% in the quarter.

CVS Pharmacy is the first retail pharmacy in the NovoCare pharmacy network. This will enable CVS Pharmacy to provide eligible patients at its 9,000 community health locations with convenient, safe, and affordable access to Novo Nordisk A/S' (NYSE:NVO) Wegovy.

Guidance: CVS Health raises fiscal year 2025 adjusted EPS from $5.75-$6.00 to $6.00-$6.20 versus consensus of $5.91.

The pharmacy retailer expects GAAP EPS of $4.23-$4.43, compared to the prior range of $4.58 to $4.83, and cash flow from operations guidance of approximately $7 billion.

Price Action: CVS stock is up 7.12% at $71.46 on last check Thursday.

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