MW CVS Health's Aetna to exit Obamacare business, boost Wegovy access

By Tomi Kilgore

CVS's stock surges toward a one-year high after profit and revenue beat expectations, amid strength in the pharmacy business, and the full-year outlook was raised

Shares of CVS Health Corp. $(CVS)$ soared toward a one-year high in early Thursday trading, after the healthcare-services company dropped a bombshell on investors - it's leaving the Obamacare business and will increase access to weight-loss drug Wegovy as it reported blowout earnings.

The company said it decided to exit the individual-healthcare exchange business, where its Aetna insurance business operates Affordable Care Act plans for 2026, as part of its focus on the more profitable businesses.

CVS said it would continue to serve and provide support for its ACA members through 2025, and will provide "residual activities" in 2026.

The company also said its CVS Caremark pharmacy-benefit-manager business is partnering with Denmark-based Novo Nordisk A/S $(NVO)$ to "significantly increase access to Wegovy" for its members.

Starting July 1, CVS said Wegovy will be the preferred weight-loss prescription drug for its members.

(See related story from earlier this week on Hims & Hers teaming up with Novo Nordisk.)

CVS's stock shot up 9.6% in premarket trading, making it one of the S&P 500 index's SPX top performers ahead of the open. That put the stock on track to open at around the highest closing prices since early April 2024.

Meanwhile, shares of Eli Lilly & Co. $(LLY)$, which makes Wegovy rival Zepbound, slumped 4.2% in the premarket.

CVS also reported first-quarter earnings and raised its full-year outlook.

Net income for the quarter to March 31 jumped 60% from the same period a year ago to $1.78 billion.

Adjusted earnings per share, which excludes nonrecurring items, rose to $2.25 from $1.31 - well above the average analyst EPS estimate compiled by FactSet of $1.70. The margin of that bottom-line beat was the widest since the second quarter of 2020.

Total revenue grew 7% to $94.59 billion, exceeding the FactSet consensus of $93.66 billion.

CVS's fastest-growing business segment was pharmacy and consumer wellness, which saw revenue rise 11.1% to $31.91 billion, above the FactSet consensus of $30.86 billion. Growth was driven by a favorable mix of drug sales and higher prescription volumes.

Revenue from the healthcare benefits business, which includes Aetna, was up 8% to $34.81 billion. The medical-benefit ratio, or what the company pays out relative to what it takes in - in this case, lower is better - fell to 87.3% from 90.4%, while membership increased by 1.1%.

For health services, which include CVS Caremark, revenue increased 7.9% to $43.46 billion, helped by growth in specialty pharmacy and higher prices on branded drugs. Pharmacy claims processed rose 1.3%.

For 2025, the company lifted its guidance for adjusted EPS to $5.00 to $6.20 from $5.75 to $6.00, and for cash flow from operations to about $7 billion from about $6.5 billion.

Even before Thursday's gains, CVS shares have soared 48.6% in 2025, while the Health Care Select Sector SPDR ETF XLV has gained 2.1% and the S&P 500 has lost 5.3%.

-Tomi Kilgore

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May 01, 2025 08:11 ET (12:11 GMT)

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