CVS Health’s (CVS) Path Forward: Policy Challenges, Analyst Views, and Dividend Stability

Core Viewpoint - CVS Health Corporation is considered one of the best cheap stocks to buy for 2026, despite a recent price target cut by BofA Securities from $100 to $95 while maintaining a Buy rating due to disappointing proposals from CMS [1]. Group 1: CMS Proposal Impact - The Centers for Medicare & Medicaid Services (CMS) proposed a net all-in rate of 2.54% for the calendar year 2027, which is below market expectations of 4-6% [2]. - The new CMS-HCC model for calculating risk scores is expected to reduce payments by approximately 1.53% in 2027, aiming to eliminate certain billing practices by excluding diagnosis information from unlinked Chart Review Records in risk score calculations starting in 2027 [2]. Group 2: Analyst Perspectives - Bernstein raised its price target for CVS to $87 while maintaining a Market Perform rating, highlighting growth opportunities through Aetna but acknowledging ongoing challenges in the pharmacy benefit manager sector [3]. Group 3: Dividend Announcement - CVS's Board of Directors approved a quarterly dividend of $0.665 per share on common stock, with payment scheduled for February 2 to shareholders on record as of January 22 [4]. Group 4: Company Overview - CVS Health operates as a diversified healthcare company, providing retail pharmacies, pharmacy benefit management services, and health insurance offerings under Aetna, including prescription drug distribution, walk-in medical clinics, and insurance plans [5].