The One Number CVS Health Stock Investors Should Watch

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The number that matters most at CVS Health (CVS) is the share of premiums its Aetna insurance arm spends on members' medical care. CVS bulls might be betting on that share to fall. You probably think of CVS as a drugstore chain, but its insurance business is mending. Yet the stock has lost 12.1% since July 27 while the S&P 500 gained 3.1%, and therein lies the contradiction. So how much has Aetna's turnaround added to CVS's outlook?

Aetna Added Over $1 Billion To CVS's Profit Outlook

During the August 5 call, management raised its full-year 2026 forecast for adjusted operating income in the Health Care Benefits segment, which is Aetna, by over $1 billion. About $500 million of that came from a risk adjustment update and favorable prior-year development. The forecast for the Pharmacy and Consumer Wellness segment rose by a far smaller $220 million.

Aetna posted an 87.4% medical benefit ratio, the share of premiums paid out for members' care, in fiscal Q2 2026. Management said the metric improved meaningfully from a year earlier. The segment earned about $2.4 billion of adjusted operating income in the quarter, and management raised its full-year 2026 adjusted EPS forecast for the overall company to a range of $7.90 to $8.10.

What Is Weighing On CVS Stock?

Two pieces of news stand out. CVS shares fell 5.1% on August 5, the day of the second-quarter report, even though the company raised its full-year forecasts. News reports that day said cautious guidance pressured the shares. Management said its outlook kept a prudent view of medical costs for the second half. Then, on October 9, the stock dipped after Aetna's plans rated four stars or higher lost ground in the latest federal Medicare Advantage ratings, news reports said.

The improvement at Aetna will not all repeat. Management said changes in its individual exchange risk adjustment for the 2025 plan year and favorable prior year development together helped the ratio by about 140 basis points in the quarter. Aetna also ended the quarter with about 26 million medical members, roughly 700,000 fewer than a year earlier, mainly because it exited the individual exchange business.

Yet management says Aetna continues to execute on its margin recovery. At $93.47 on October 23, the shares traded at about 11.7 times the midpoint of management's 2026 adjusted EPS forecast.

How Would You Know Aetna's Recovery Has Stalled?

You would see it first if management raised its full-year medical benefit ratio forecast above 89.75%, plus or minus 25 basis points, since a higher ratio leaves Aetna less of each premium as profit. A further drop in medical members would serve as the second sign.

CVS would face any such slip with heavy debt. The company's debt equals 63.8% of its market value, compared with 19.4% for the S&P 500. At the end of the quarter, management placed the leverage ratio, which measures debt against earnings, at about 3.5 times and expects it to improve.

Aetna added far more to the 2026 outlook for CVS than the pharmacy segment did, and its medical benefit ratio is the number to watch when the company reports its fiscal Q3 2026 results.

How To Act On CVS?

Not necessarily on CVS Health alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from CVS Health's own industry that have beaten it. Over the five years to October 2026, Quest Diagnostics stock rose 82% and DaVita stock rose 59%, while CVS Health stock rose 26%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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