Core Viewpoint - CVS Health Corporation is considered a cheap healthcare stock with potential for investment as it heads into 2026, supported by positive guidance from its Aetna business unit despite challenges in its Pharmacy Benefit Manager (PBM) segment [1][2]. Group 1: Analyst Ratings and Price Targets - Bernstein SocGen Group raised the price target for CVS Health Corporation from $77.00 to $86.00 while maintaining a 'Market Perform' rating, attributing the improved outlook to the Aetna unit [1]. - RBC Capital maintained an 'Outperform' rating with a price target of $93.00 ahead of the company's Investor Day presentation, emphasizing CVS's strong position in the evolving PBM market [4]. Group 2: Business Segments and Growth Potential - CVS operates through three segments: Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness, with Aetna identified as a significant growth driver [5]. - The PBM segment is expected to see growth resume alongside an increase in drug spending, although near-term earnings growth remains uncertain due to complexities in the PBM environment [3].

Core Insights - CVS Health reported a strong third quarter with a 47% year-over-year increase in adjusted earnings per share (EPS) to $1.60 and record revenues of $103 billion, up approximately 8% from the previous year [1][8] - The company has raised its full-year 2025 adjusted EPS guidance for the third consecutive time, now projecting between $6.55 and $6.65, compared to the earlier range of $6.30-$6.40 [1] CVS Health Performance - The Health Care Benefits segment saw a significant turnaround with adjusted operating income of approximately $314 million, driven by the government business and the impact of the Inflation Reduction Act on the Medicare Part D program [2] - The medical benefit ratio improved to 92.8%, a decrease of 240 basis points year over year, indicating better cost management [2] - The Pharmacy & Consumer Wellness segment experienced nearly 12% revenue growth, attributed to an increase in prescription volume and the acquisition of Rite Aid's prescription files [3][8] Market Position and Valuation - CVS Health shares have increased by 43.5% over the past year, contrasting with a 5.5% decline in the industry [6] - The company is currently trading at a forward five-year price/sales (P/S) ratio of 0.23, which is lower than the industry average of 0.45 [9]