CVS Health Delivers MBR Improvement: Is More Progress in the Cards?

Core Insights - CVS Health's Health Care Benefits segment reported a medical benefit ratio (MBR) of 92.8% in Q3 2025, down from 95.2% in the previous year, indicating improved business performance despite some challenges [1][8] Financial Performance - The improvement in MBR was influenced by the absence of approximately $1.1 billion in premium deficiency reserves (PDR) recorded in Q3 2024, with $174 million of PDR utilized in the first half of 2025 [2] - CVS Health anticipates a full-year 2025 MBR of around 91%, reflecting a cautious outlook on medical cost trends for the remainder of the year [4][8] Market Position and Competitors - CVS Health's stock has increased by 27.2% over the past six months, outperforming the industry average growth of 11.4% [7] - The company is trading at a forward five-year price/sales (P/S) ratio of 0.24, which is lower than the industry average of 0.49, indicating potential undervaluation [9] Analyst Sentiment - Analysts maintain a positive outlook on CVS Health, supported by rising earnings estimates for 2025 and 2026 [10]