A caller on the September 2 episode of Mad Money noted that CVS Health Corporation (NYSE: CVS ) is up 21% this year, sports a 3% dividend, and trades at a 28 valuation compared to its 54 average. Pointing to raised guidance, higher price targets, and a massive capital plan, they asked if it makes sense to hold the position for another year. In response, Jim Cramer said:

This is CVS. Dave Joyner does a fantastic job. I think you should own it; don't trade it. It's a terrific stock, and we want to buy it for the Charitable Trust. That's how much we care about it. We think it's absolutely a sensational situation now.

Cramer has been bullish on the company for months, and on July 9, Cramer called it a "strong buy," highlighting CEO David Joyner's leadership and Aetna's position against Amazon, and noted that "Aetna is crushing it."

Earnings Show Aetna Recovery Gaining Momentum

CVS Health Corporation (NYSE:CVS) reported second-quarter revenue of $106.1 billion, up 7.3% year over year, while adjusted EPS increased to $2.58 from $1.81. Health Care Benefits adjusted operating income rose 85.5% to approximately $2.43 billion, helped by improved performance in the Government business and the absence of a $471 million premium deficiency reserve recorded a year earlier. Moreover, management raised 2026 adjusted EPS guidance to $7.90-$8.10 from $7.30-$7.50 and increased operating cash flow guidance to at least $11.5 billion from $9.5 billion.

It is worth noting that the Health Care Benefits segment's medical benefit ratio fell to 87.4% in the second quarter from 89.9% a year earlier. Management said year-to-date adjusted operating income had improved by more than $2 billion from the prior year and that momentum in Aetna's margin recovery was expected to continue. Management also said its 2027 bids assume medical-cost trends will remain elevated. CVS has renewed about 75% of its group Medicare Advantage book for 2027. Furthermore, management said said $8.44 was a reasonable floor for adjusted EPS in 2027.

2027 Brings New Risks

CVS Health Corporation (NYSE:CVS) expects Caremark membership to decline in 2027 as it moves toward lowest net cost pricing and takes a more deliberate approach to client renewals. Management said 340B pressure was a headwind in the second quarter and is expected to remain a headwind going into 2027. Additionally, medical costs remain elevated.

Furthermore, CVS is prioritizing debt reduction and repaid $3.29 billion of long-term debt during the first six months of 2026. The company did not repurchase any shares during the period. The 2027 outlook therefore remains important for investors. The company's performance beyond 2026 will depend largely on medical costs and Caremark membership.