CVS Health and Merck Stocks Undervalued, 2026 Revenue Guidance of $400 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- CVS Health Recovery: CVS Health's stock rebounded 77% in 2025, with a revenue guidance of at least $400 billion for 2026; despite challenges from business scaling back, the focus on cost-cutting and profitable growth suggests significant upside potential.
- Profitability Enhancement: CVS Health anticipates adjusted earnings per share to grow at a compound annual growth rate in the mid-teens through 2028, indicating that while overall sales may decline, stronger margins and faster bottom-line growth will bolster financial health.
- Merck New Drug Launch: Merck's new drug Winrevair, launched in 2024, is expected to generate over $1 billion in revenue for fiscal year 2025; despite challenges from declining sales of Keytruda and HPV vaccines, the new product's introduction will aid in the company's recovery.
- Acquisition-Driven Potential: Through acquisitions, Merck has added promising candidates like CD388 to its pipeline, which is expected to revolutionize the flu vaccine market, with several key approvals and label expansions anticipated in the coming years, enhancing the company's competitive position.
Analyst Views on CVS
Wall Street analysts forecast CVS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CVS is 96.71 USD with a low forecast of 91.00 USD and a high forecast of 105.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
16 Buy
1 Hold
0 Sell
Strong Buy
Current: 82.680
Low
91.00
Averages
96.71
High
105.00
Current: 82.680
Low
91.00
Averages
96.71
High
105.00
About CVS
CVS Health Corporation is a health solutions company. The Company's segments include Health Care Benefits, Health Services, Pharmacy & Consumer Wellness and Corporate/Other. Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, PDPs and Medicaid health care management services. Health Services segment provides a full range of pharmacy benefit management (PBM) solutions through its CVS Caremark operations and delivers health care services in its medical clinics, virtually, and in the home. Pharmacy & Consumer Wellness segment dispenses prescriptions in its CVS Pharmacy retail locations and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
