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Here's How CVS Is Focusing on Aetna's Profitability Turnaround
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Key Takeaways
CVS Health's Aetna turnaround gained traction as first-half adjusted operating income rose more than $2B.
CVS Health raised 2026 Health Care Benefits adjusted operating income guidance to $5.03-$5.37B.
Claims Assist Manager and Clinical Collaboration are helping CVS improve claims and provider coordination.
CVS Health (CVS - Free Report) is executing a multi-year plan to restore Aetna, its insurance business, to target margins. The strategy focuses on disciplined pricing, better medical cost management, clinical programs and operational improvements. The benefits became more visible in the first half of 2026. Health Care Benefits adjusted operating income increased more than $2 billion year over year. In the second quarter, the medical benefit ratio (MBR) improved to 87.4% from 89.9% a year earlier.
The company raised its 2026 Health Care Benefits adjusted operating income outlook to $5.03-$5.37 billion. This is more than $1 billion above its previous guidance. The company now expects a full-year MBR of about 89.75%, within a range of 89.5-90.0%. Aetna’s profitability is expected to improve further over the next couple of years as the business moves toward its target margins.
Operational initiatives are also supporting the recovery. Aetna’s Claims Assist Manager is designed to reduce processing time for complex manually reviewed claims by more than 20%. CVS is also expanding its Aetna Clinical Collaboration program to improve coordination with healthcare providers. These efforts should help CVS rebuild Aetna’s profitability while strengthening member and provider engagement.
Peer Update
McKesson (MCK - Free Report) continues to expand its community-based specialty platform through the U.S. Oncology Network and related assets. In first-quarter fiscal 2027, Oncology & Multispecialty revenues increased 33% and adjusted operating profit rose 41%. Prescription Technology Solutions continues to benefit from demand for access and affordability programs across therapeutic categories. McKesson also began supporting the CMS Medicare GLP-1 Bridge program, where 95% of submitted prior authorization requests receive a determination within 30 minutes.
Align Technology (ALGN - Free Report) continues to broaden the clinical reach of the Invisalign portfolio beyond traditional adult and teen alignment. The Invisalign Palatal Expander, Invisalign First and Invisalign with Mandibular Advancement featuring Occlusal Blocks expand treatment options for growing patients and more complex cases. In the second quarter, teen and growing-patient treatment starts increased 7.2% year over year to 240,000 cases.
Align is also extending the portfolio through DSP touch-up cases, patient-specific financing options and products with fewer or no additional aligners.
CVS’ Price Performance, Valuation and Estimates
Over the past three months, CVS Health shares have risen 0.8% compared with the industry’s 11.9% growth.
Image Source: Zacks Investment Research
CVS shares are trading at a forward five-year price-to-sales ratio of 0.29, lower than the industry average of 0.50. The stock has a Value Score of A.
Image Source: Zacks Investment Research
The consensus estimate for the company’s 2026 earnings has been showing a bullish trend.
View the Zacks #1 Rank List
Image: Bigstock
Here's How CVS Is Focusing on Aetna's Profitability Turnaround
Key Takeaways
CVS Health (CVS - Free Report) is executing a multi-year plan to restore Aetna, its insurance business, to target margins. The strategy focuses on disciplined pricing, better medical cost management, clinical programs and operational improvements. The benefits became more visible in the first half of 2026. Health Care Benefits adjusted operating income increased more than $2 billion year over year. In the second quarter, the medical benefit ratio (MBR) improved to 87.4% from 89.9% a year earlier.
The company raised its 2026 Health Care Benefits adjusted operating income outlook to $5.03-$5.37 billion. This is more than $1 billion above its previous guidance. The company now expects a full-year MBR of about 89.75%, within a range of 89.5-90.0%. Aetna’s profitability is expected to improve further over the next couple of years as the business moves toward its target margins.
Operational initiatives are also supporting the recovery. Aetna’s Claims Assist Manager is designed to reduce processing time for complex manually reviewed claims by more than 20%. CVS is also expanding its Aetna Clinical Collaboration program to improve coordination with healthcare providers. These efforts should help CVS rebuild Aetna’s profitability while strengthening member and provider engagement.
Peer Update
McKesson (MCK - Free Report) continues to expand its community-based specialty platform through the U.S. Oncology Network and related assets. In first-quarter fiscal 2027, Oncology & Multispecialty revenues increased 33% and adjusted operating profit rose 41%. Prescription Technology Solutions continues to benefit from demand for access and affordability programs across therapeutic categories. McKesson also began supporting the CMS Medicare GLP-1 Bridge program, where 95% of submitted prior authorization requests receive a determination within 30 minutes.
Align Technology (ALGN - Free Report) continues to broaden the clinical reach of the Invisalign portfolio beyond traditional adult and teen alignment. The Invisalign Palatal Expander, Invisalign First and Invisalign with Mandibular Advancement featuring Occlusal Blocks expand treatment options for growing patients and more complex cases. In the second quarter, teen and growing-patient treatment starts increased 7.2% year over year to 240,000 cases.
Align is also extending the portfolio through DSP touch-up cases, patient-specific financing options and products with fewer or no additional aligners.
CVS’ Price Performance, Valuation and Estimates
Over the past three months, CVS Health shares have risen 0.8% compared with the industry’s 11.9% growth.
Image Source: Zacks Investment Research
CVS shares are trading at a forward five-year price-to-sales ratio of 0.29, lower than the industry average of 0.50. The stock has a Value Score of A.
Image Source: Zacks Investment Research
The consensus estimate for the company’s 2026 earnings has been showing a bullish trend.
Image Source: Zacks Investment Research
CVS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.