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].

Company Overview - CVS Health Corporation has a market cap of $105.4 billion and provides integrated health solutions through its Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments, offering health insurance, pharmacy benefit management, and retail pharmacy services nationwide [1] Stock Performance - CVS stock has significantly outperformed the broader market over the past 52 weeks, surging 53.8% compared to the S&P 500 Index's gain of 13.9% [2] - Year-to-date, CVS stock has risen 5.7%, while the S&P 500 Index has only gained 1.5% [2] - CVS shares have also outpaced the State Street Health Care Select Sector SPDR ETF's return of 9.6% over the past 52 weeks [3] Recent Financial Results - On October 29, CVS reported a Q3 2025 loss of $3.13 per share, primarily due to a $5.7 billion goodwill impairment charge related to its Health Care Delivery unit, resulting in a $3.2 billion operating loss compared to a profit the previous year [4] - The company has sharply cut its full-year 2025 EPS guidance to a loss of $(0.34) - $(0.24) from prior expectations of $3.84 - $3.94 [4] Future Earnings Expectations - For the fiscal year ending December 2025, analysts expect CVS' adjusted EPS to grow 22.7% year-over-year to $6.65, with a promising earnings surprise history [5] - Among 24 analysts covering the stock, the consensus rating is a "Strong Buy," based on 19 "Strong Buy" ratings, two "Moderate Buys," and three "Holds" [5] Analyst Ratings and Price Targets - The current analyst configuration is slightly less bullish than three months ago, with 20 "Strong Buy" ratings [6] - Bernstein raised its price target on CVS Health to $91 while maintaining a "Market Perform" rating, with a mean price target of $94.74, suggesting a nearly 13% premium to CVS' current price [6] - The highest price target of $105 indicates a potential upside of 25.2% [6]