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CVS vs. ELV: Which Healthcare Titan Is the Stronger Investment Today?
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Key Takeaways
CVS posted revenue growth across all segments in Q2 2025 and is restoring Aetna's target margins
Elevance cut its 2025 EPS outlook to $30 as ACA and Medicaid challenges weigh on earnings.
CVS boosts digital health with $20B investment and targets $500M in cost savings next year.
The U.S. healthcare services market continues to climb steadily and is set to expand to $9.25 trillion in 2025 from $8.77 trillion in 2024 (as per Research and Markets). Growth is fueled by factors like telehealth and digital health, healthcare workforce shortages, value-based care and the potential shifts in reimbursement models, among others. In this fiercely competitive space, CVS Health (CVS - Free Report) and Elevance Health (ELV - Free Report) stand out as two major players — each dominating with extensive reach and diversified services.
Valued at $90.32 billion, CVS Health delivers broad healthcare benefits via Aetna, a full range of pharmacy benefit management (PBM) solutions through its CVS Caremark, and dispenses prescriptions across CVS Pharmacy retail locations. Meanwhile, Elevance Health (market cap of $70.71 billion) offers a broad spectrum of network-based managed care risk-based plans to the Individual, Employer Group, Medicaid and Medicare markets.
Let’s dive deep into how these healthcare titans are positioned today.
The Case for CVS Health
In an elevated utilization environment, the company delivered revenue growth across all three operating segments in the second quarter of 2025. CVS is advancing in the multi-year effort to restore Aetna to its target margins by realigning the organization, strengthening its talent and using technology to enhance operations and reduce friction, including simplifying and streamlining the prior authorization process.
In Health Care Delivery, Signify Health is driving robust in-home health evaluation (IHE) volumes. CVS remains focused on improving Oak Street’s financial performance, following a higher medical benefit ratio in the quarter. Earlier this year, the company announced its exit from the Accountable Care Organization Realizing Equity, Access and Community Health model (“ACO REACH”) program and the sale of the Medicare Shared Savings Program (“MSSP”) business to Wellvana Health.
Meanwhile, CVS Caremark has taken a formulary action to prefer Novo Nordisk’s Wegovy. The company is enhancing the impact of GLP-1 drugs by pairing them with additional lifestyle clinical support through its weight management program. Impressively, Caremark is off to a strong start to the 2026 selling season, with retention expected in the high 90s. Effective January 2026, CVS Health will also exit the individual exchange business where Aetna independently operates Affordable Care Act (“ACA”) plans, citing continued underperformance.
CVS also agreed to acquire the prescription files of certain Rite Aid pharmacies and operate 64 Rite Aid stores, which is expected to boost its Pharmacy and Consumer Wellness segment. Its innovative pharmacy model, CostVantage, addresses the persistent reimbursement pressures in the retail pharmacy industry by offering greater transparency and simplicity.
On the digital front, CVS is investing in fast-growing spaces like enterprise data platforms, cloud capabilities and emerging technologies such as voice, AI, and robotics to automate and reduce costs. The company recently committed $20 billion over the next decade to build a more tech-driven consumer health experience. Meanwhile, CVS’ enterprise-wide restructuring aims to streamline operations, improve efficiency and deliver more than $500 million in cost savings in 2025. Strong cash flow generation is also a key strength.
The Case for Elevance Health
Membership shifts from Medicaid into the company’s Individual ACA business following the April 2023 redetermination process, together with lower membership effectuation rates, have fueled a market-wide increase in morbidity, resulting in elevated medical cost trends. In the second quarter of 2025, Medicaid cost trend decelerated, but at a more modest pace than anticipated, due to higher member acuity and an increase in utilization. Nonetheless, Elevance Health expects these pressures to persist through the second half of 2025.
The company closed the second quarter with 45.6 million medical members, down approximately 200,000 sequentially. The consolidated benefit expense ratio was 88.9%, up 260 basis points from last year, driven by the ACA and Medicaid businesses. While July rate updates tracked with its initial assumptions, they lagged current trend levels, signaling a longer path to Medicaid margin recovery.
On a promising note, Elevance Health continues to show strength in its Medicare Advantage portfolio. Within Carelon, CarelonRx is gaining traction with its integrated medical pharmacy offering, while Carelon Services benefits from the rapid scaling of CareBridge across dual-eligible and high-acuity Medicaid populations.
The company is also working to stabilize trends, particularly in high-cost areas like specialty services, post-acute care and certain outpatient settings. It has streamlined prior authorization processes, with more than half of electronic requests now processed in real time and fewer requirements for top-performing providers. AI-enabled tools such as Health OS and Intelligent Clinical Assist are enhancing workflows and speeding up routine approvals. The value-based care portfolio is also expanding, particularly in behavioral health and oncology.
In the second quarter, operating income increased 14% year over year, reflecting higher premium yields and recent acquisitions in home health and specialty pharmacy. Elevance Health cut its full-year adjusted earnings per share forecast to approximately $30 from the previous $34.15-$34.85 range, citing ACA and Medicaid challenges. The benefit expense ratio is expected to be around 90%. Management is also monitoring the potential impact of the new budget reconciliation bill, especially Medicaid work requirements, more frequent eligibility reviews and the scheduled expiration of enhanced marketplace subsidies.
CVS and ELV: Price Performance and Valuation
Year to date, CVS shares have rallied 59.4%, while shares of ELV have lost 15.9%.
Image Source: Zacks Investment Research
CVS Health is trading at a forward 12-month price-to-sales of 0.23X, well below the 0.40X industry average and also cheaper than Elevance Health’s forward sales multiple of 0.34X.
Image Source: Zacks Investment Research
EPS Projections for CVS and ELV
The Zacks Consensus Estimate for CVS Health’s 2025 EPS implies year-over-year growth of 16.6% to $6.32. Estimates have shown an upward trend in the last 90 days.
Image Source: Zacks Investment Research
Meanwhile, the consensus estimate for Elevance Health’s EPS lies at $30.15 for 2025, suggesting a decrease of 8.8%. Analyst estimates have moved down 12.4% in the last 90 days.
Image Source: Zacks Investment Research
Verdict: CVS Is the Better Option
While Elevance Health’s strength in Medicare Advantage and ongoing Carelon traction are commendable, it faces challenges from shifting dynamics in the ACA and Medicaid markets. Its declining earnings estimates suggest caution. Meanwhile, CVS Health is making headway with Aetna, advancing its digital commitment and positioning for operational gains from its restructuring plan, all of which support its long-term growth prospects. With estimate trends rising higher and shares trading at a discount, CVS clearly appears to be the stronger option.
While CVS carries a Zacks Rank #2 (Buy), ELV has a Zacks Rank #5 (Strong Sell).
Image: Bigstock
CVS vs. ELV: Which Healthcare Titan Is the Stronger Investment Today?
Key Takeaways
The U.S. healthcare services market continues to climb steadily and is set to expand to $9.25 trillion in 2025 from $8.77 trillion in 2024 (as per Research and Markets). Growth is fueled by factors like telehealth and digital health, healthcare workforce shortages, value-based care and the potential shifts in reimbursement models, among others. In this fiercely competitive space, CVS Health (CVS - Free Report) and Elevance Health (ELV - Free Report) stand out as two major players — each dominating with extensive reach and diversified services.
Valued at $90.32 billion, CVS Health delivers broad healthcare benefits via Aetna, a full range of pharmacy benefit management (PBM) solutions through its CVS Caremark, and dispenses prescriptions across CVS Pharmacy retail locations. Meanwhile, Elevance Health (market cap of $70.71 billion) offers a broad spectrum of network-based managed care risk-based plans to the Individual, Employer Group, Medicaid and Medicare markets.
Let’s dive deep into how these healthcare titans are positioned today.
The Case for CVS Health
In an elevated utilization environment, the company delivered revenue growth across all three operating segments in the second quarter of 2025. CVS is advancing in the multi-year effort to restore Aetna to its target margins by realigning the organization, strengthening its talent and using technology to enhance operations and reduce friction, including simplifying and streamlining the prior authorization process.
In Health Care Delivery, Signify Health is driving robust in-home health evaluation (IHE) volumes. CVS remains focused on improving Oak Street’s financial performance, following a higher medical benefit ratio in the quarter. Earlier this year, the company announced its exit from the Accountable Care Organization Realizing Equity, Access and Community Health model (“ACO REACH”) program and the sale of the Medicare Shared Savings Program (“MSSP”) business to Wellvana Health.
Meanwhile, CVS Caremark has taken a formulary action to prefer Novo Nordisk’s Wegovy. The company is enhancing the impact of GLP-1 drugs by pairing them with additional lifestyle clinical support through its weight management program. Impressively, Caremark is off to a strong start to the 2026 selling season, with retention expected in the high 90s. Effective January 2026, CVS Health will also exit the individual exchange business where Aetna independently operates Affordable Care Act (“ACA”) plans, citing continued underperformance.
CVS also agreed to acquire the prescription files of certain Rite Aid pharmacies and operate 64 Rite Aid stores, which is expected to boost its Pharmacy and Consumer Wellness segment. Its innovative pharmacy model, CostVantage, addresses the persistent reimbursement pressures in the retail pharmacy industry by offering greater transparency and simplicity.
On the digital front, CVS is investing in fast-growing spaces like enterprise data platforms, cloud capabilities and emerging technologies such as voice, AI, and robotics to automate and reduce costs. The company recently committed $20 billion over the next decade to build a more tech-driven consumer health experience. Meanwhile, CVS’ enterprise-wide restructuring aims to streamline operations, improve efficiency and deliver more than $500 million in cost savings in 2025. Strong cash flow generation is also a key strength.
The Case for Elevance Health
Membership shifts from Medicaid into the company’s Individual ACA business following the April 2023 redetermination process, together with lower membership effectuation rates, have fueled a market-wide increase in morbidity, resulting in elevated medical cost trends. In the second quarter of 2025, Medicaid cost trend decelerated, but at a more modest pace than anticipated, due to higher member acuity and an increase in utilization. Nonetheless, Elevance Health expects these pressures to persist through the second half of 2025.
The company closed the second quarter with 45.6 million medical members, down approximately 200,000 sequentially. The consolidated benefit expense ratio was 88.9%, up 260 basis points from last year, driven by the ACA and Medicaid businesses. While July rate updates tracked with its initial assumptions, they lagged current trend levels, signaling a longer path to Medicaid margin recovery.
On a promising note, Elevance Health continues to show strength in its Medicare Advantage portfolio. Within Carelon, CarelonRx is gaining traction with its integrated medical pharmacy offering, while Carelon Services benefits from the rapid scaling of CareBridge across dual-eligible and high-acuity Medicaid populations.
The company is also working to stabilize trends, particularly in high-cost areas like specialty services, post-acute care and certain outpatient settings. It has streamlined prior authorization processes, with more than half of electronic requests now processed in real time and fewer requirements for top-performing providers. AI-enabled tools such as Health OS and Intelligent Clinical Assist are enhancing workflows and speeding up routine approvals. The value-based care portfolio is also expanding, particularly in behavioral health and oncology.
In the second quarter, operating income increased 14% year over year, reflecting higher premium yields and recent acquisitions in home health and specialty pharmacy. Elevance Health cut its full-year adjusted earnings per share forecast to approximately $30 from the previous $34.15-$34.85 range, citing ACA and Medicaid challenges. The benefit expense ratio is expected to be around 90%. Management is also monitoring the potential impact of the new budget reconciliation bill, especially Medicaid work requirements, more frequent eligibility reviews and the scheduled expiration of enhanced marketplace subsidies.
CVS and ELV: Price Performance and Valuation
Year to date, CVS shares have rallied 59.4%, while shares of ELV have lost 15.9%.
Image Source: Zacks Investment Research
CVS Health is trading at a forward 12-month price-to-sales of 0.23X, well below the 0.40X industry average and also cheaper than Elevance Health’s forward sales multiple of 0.34X.
Image Source: Zacks Investment Research
EPS Projections for CVS and ELV
The Zacks Consensus Estimate for CVS Health’s 2025 EPS implies year-over-year growth of 16.6% to $6.32. Estimates have shown an upward trend in the last 90 days.
Image Source: Zacks Investment Research
Meanwhile, the consensus estimate for Elevance Health’s EPS lies at $30.15 for 2025, suggesting a decrease of 8.8%. Analyst estimates have moved down 12.4% in the last 90 days.
Image Source: Zacks Investment Research
Verdict: CVS Is the Better Option
While Elevance Health’s strength in Medicare Advantage and ongoing Carelon traction are commendable, it faces challenges from shifting dynamics in the ACA and Medicaid markets. Its declining earnings estimates suggest caution. Meanwhile, CVS Health is making headway with Aetna, advancing its digital commitment and positioning for operational gains from its restructuring plan, all of which support its long-term growth prospects. With estimate trends rising higher and shares trading at a discount, CVS clearly appears to be the stronger option.
While CVS carries a Zacks Rank #2 (Buy), ELV has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.