CVS Health (CVS) is highlighting clearer long-term earnings prospects and solid performance across its core operations that point to ongoing signs of progress in its turnaround, Morgan Stanley said in a Wednesday note.

Management raised its long term outlook to a mid-teens earnings per share compound annual growth rate for 2026-2028, far exceeding its earlier 6% baseline and matching prior consensus estimates. The improved guidance adds momentum for a stock that has climbed roughly 74% year to date.

The recovery in the Health Care Benefits segment stood out,

as the company reiterated its goal of returning the business to target margins. Early annual election period indications, meanwhile, show 2026 Medicare Advantage enrollment tracking towards goal of flat to down modestly with

margin recovery towards the long-term range of 3% to 4%.

The outlook was underpinned by the durability of its pharmacy benefit management business, with long-term guidance now expected to be at least flat, from negative 5% prior.

CVS highlighted its sizable technology initiative, including $20 billion in planned investments over 10 years and a 2026 platform that will centralize patient data and deploy AI tools across care management, claims processing, and pharmacy operations.

Morgan Stanley said the updated strategy, clearer long-term earnings outlook, and improving results across key segments reinforce its positive view on the stock.

The firm maintained an overweight rating and raised its price target to $93 from $89.

Price: 78.41, Change: +0.17, Percent Change: +0.22