By Josh Nathan-Kazis

CVS Health is the hottest healthcare stock in the S&P 500, gaining nearly 50% so far this year.

The surge is a sharp reversal from 2024, when the stock dropped 43.2% while the S&P 500 climbed more than 20%.

The massive health conglomerate, which holds a major insurer, a big retail pharmacy chain, and one of the largest U.S. pharmacy benefit managers, reports its first-quarter results on Thursday morning.

The results arrive as the company rides a wave of optimism. Analysts expect CVS to report earnings of $1.70 per share for the quarter on revenue of $93.7 billion, according to FactSet. Wall Street anticipates a medical loss ratio -- a key metric that tracks the proportion of premiums paid out to cover medical expenses -- of 88.3%.

Traders think the company will do better, according to UBS analyst Kevin Caliendo, who wrote in an April 28 note that investors expect earnings to beat consensus estimates.

This year has been good for CVS.

The stock had its second-best day in history on Feb. 12: It climbed 15% after a strong fourth-quarter earnings report raised investor hopes that CVS's disastrously bad 2024 was firmly in the rear-view.

Investors also bid up CVS shares early in April, when the Trump administration unexpectedly raised next year's reimbursement rates for Medicare Advantage, a privately managed government health program.

For CVS, challenges mounted in 2023 and 2024 amid threats to all its major businesses. The insurance division, Aetna, struggled to cope with industry-wide increases in medical spending by seniors on Medicare Advantage plans, while the pharmacy-benefit manager faced pressure from Washington policymakers. The retail pharmacy chain, meanwhile, has struggled under intense reimbursement pressures.

The company has been looking for a reset. It appointed a new CEO, David Joyner, in October.

Its recent share price of $66 is still well below where it was trading at the start of 2024, when the stock was closing above $80 per share.

The company has told investors to expect adjusted diluted earnings of between $5.75 and $6 in 2025.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 30, 2025 16:30 ET (20:30 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.