CVS Health (CVS) is increasingly more likely to reach its 3% Medicare Advantage target margin in 2028, RBC Capital Markets analyst said in a note Wednesday.

Analysts said the company's Q1 adjusted earnings "comfortably" beat expectations, driven by "strong" topline growth and a notable improvement in profitability in the Health Care Benefits segment.

Medical costs came in below expectations and, while the company maintained its medical benefit ratio guidance for the year, it is increasingly likely to outperform, according to the note.

The brokerage raised its 2026 adjusted earnings estimate for the company to $7.41 from $7.10. Analysts surveyed by FactSet expect $7.29.

RBC reiterated its outperform rating on the stock and increased its price target to $107 from $93.

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