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CVS Health Gains as Revenue Grows, Dividend Remains Strong
Written by Gabriel Osorio-Mazilli. Published 9/25/2025.
Key Points
- CVS has broken past 52-week highs, and this newfound optimism is likely to carry the stock even higher in the coming quarters.
- With strong financials and fundamentals, seeing Wall Street analysts raise their price targets makes sense.
- Institutions are also buying in on this momentum play with an attractive dividend payout.
One of the best ways for any investor to lock in additional portfolio upside is to start exploring areas where few others are willing to venture—especially the least popular corners of the market.
In the consumer staples sector, one typically quiet company is now breaking out to new 52-week highs—and the trend could persist.
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Click here to watch Jeff's urgent briefingShares of CVS Health Corp. (NYSE: CVS) have been among the top performers in the space, in part because its market share is growing as its closest rival, Walgreens Boots Alliance Inc. (NASDAQ: WBA), continues to cut back on physical locations each quarter.
That open field may explain some of the bullishness, but investors are also digging into CVS's underlying financials to see where the company could expand in the quarters ahead. Today's enthusiasm could be just the start of CVS's upside potential.
Additionally, steady, predictable names like CVS may become even more attractive now that Federal Reserve Chair Jerome Powell has characterized stocks as "highly valued" assets.
Newfound Optimism for CVS Stock
This $96.8 billion company has room to grow, and its new 52-week high suggests the market is pricing in that potential. Year to date, CVS shares have rallied more than 70%, but there are fundamental reasons this momentum could continue.
A chorus of institutional investors, led by Ameriprise Financial, increased their holdings by 5.2% as of August 2025, bringing their stake to $565.4 million. That follows $3.3 billion in institutional buying of CVS stock over the past quarter alone.
There's more than technical momentum at work. Barclays analyst Andrew Mok recently raised his price target on CVS to a new high of $87 per share, implying 14% more upside and the potential for another new 52-week high.
That target stands well above the $78.25 consensus, underscoring how bullish some analysts have become on CVS's outlook.
Strong Financials Boost Shareholder Confidence
Management knows that growing market share amid competitor contraction creates an opportunity to reward shareholders. CVS now pays $2.66 in dividends per share annually, which translates to a 3.5% yield—above current U.S. inflation rates.
Here's the latest on CVS's fundamentals:
In its most recent quarter, CVS reported EPS of $1.81, 24% above the MarketBeat consensus of $1.46, setting the stage for continued outperformance.
According to the company's press release, net revenues came in at $98.9 billion, an 8.4% increase from a year earlier—no small feat in a traditionally steady sector.
CVS's strong ties to government health programs have helped offset medicine and service inflation, allowing the company to reinvest in technology and streamline connections between caregivers and patients. That, in turn, reinforces its growing market share.
Investors can gauge the sustainability of these investments—and the dividend—by watching free cash flow (operating cash flow minus capital expenditures). With $185.1 billion in free cash flow, CVS has ample capacity to maintain and potentially grow its dividend program.
All of these factors—market share gains, analyst upgrades, solid earnings, and robust cash flow—position CVS for another potential earnings beat in the coming quarters, making it a less-crowded stock with attractive upside for investors.
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