10 Best Health Insurance Stocks to Buy

6. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 60

CVS Health Corporation (NYSE:CVS) is a U.S.-based healthcare company that operates a wide network of retail pharmacies and clinics across the country. Its key brands include CVS Pharmacy, a retail pharmacy chain; CVS Caremark, a pharmacy benefits manager; and Aetna, a health insurance provider.

Earlier this August, TD Cowen maintained a Hold rating on CVS Health Corporation (NYSE:CVS) following the company’s second-quarter 2024 performance, keeping a price target of $59.00. After CVS revised its yearly outlook, TD Cowen adjusted its 2024 earnings per share estimate to $6.53, aligning with the management’s updated guidance of $6.40 to $6.65. For 2025, the firm projects an 18% year-over-year increase, with EPS rising to $7.62. The 2025 projection factors in a roughly 110-basis-point margin improvement in the Medicare Advantage segment, within the company’s targeted range of 100 to 200 basis points. It also accounts for a 5% decline in Medicare Advantage membership and $500 million in anticipated cost savings.

The company has expanded its Aetna medical membership through CVS pharmacies to 9 million, reflecting an 8% increase. Additionally, Caremark now covers 13.8 million Aetna members, marking a 13% growth.

As of the end of the second quarter in 2024, 60 hedge funds tracked by Insider Monkey, out of a database of 912, held positions in CVS Health Corporation (NYSE:CVS).

Ariel Global Fund stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q2 2024 investor letter:

“American healthcare company, CVS Health Corporation (NYSE:CVS), also declined following disappointing earnings results and a subsequent reduction in full year guidance. The miss was primarily due to increased utilization of Medicare Advantage plans and weakness in the health services segment driven by the loss of a large client and continued pharmacy client price improvements. In response, management reiterated its focus on improving margins and enhancing its positioning in Medicare Advantage. CVS believes the program can remain an attractive business for Aetna and CVS Health over time and will construct its bid for 2025 as a multi-year repricing opportunity across plan level benefits. Meanwhile, CVS continues to return capital to shareholders through dividends and a recent accelerated share repurchase transaction.”