Investors pile into funds with significant CVS holdings following a quarterly earnings beat and raised guidance.
Exchange-traded funds with heavy exposure to CVS Health surged after the company reported adjusted earnings per share of $2.15, topping consensus estimates of $2.05. Revenue reached $88.9 billion, up 3.8% year-over-year, driven by pharmacy services and healthcare benefits growth.
Analysts had anticipated a softer quarter amid rising pharmacy benefit manager competition and Medicare Advantage pressures. CVS also raised its full-year adjusted EPS guidance to $8.30-$8.40, from $8.20-$8.40 previously, signaling confidence in sustained demand.
Shares of CVS climbed 4.2% in premarket trading, lifting ETFs like the Health Care Select Sector SPDR Fund (XLV) and iShares U.S. Healthcare Providers ETF (IHF).