CVS vs. UNH: Which Healthcare Stock is a Better Buy After Q2 Earnings?
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Is CVS a Good Stock to Buy Now?
CVS has shown steady performance compared to its competitors and made a strong recovery in 2025 after several challenging years. So far this year, its stock has climbed more than 45%.
For Q2, the company posted results that exceeded expectations. Notably, the Health Care Benefits segment, which includes Aetna, achieved a 39% increase in adjusted operating income. In response to these positive results, CVS raised its full-year adjusted EPS guidance to a range of $6.30 to $6.40, up from the previous $6.00 to $6.20. The company is also rolling out a $2 billion, multi-year cost-saving plan, with expected 2025 savings set to fully cover rising variable costs.
These strategic initiatives and financial metrics underscore CVS Health's strong position in the healthcare sector, making it an attractive option for investors seeking stability and growth.
Is UNH a Good Buy Right Now?
On the other hand, UnitedHealth has faced several difficulties recently. In April, it reported higher-than-expected medical costs in its Medicare division. In May, the company pulled its full-year financial forecast, and CEO Andrew Witty resigned unexpectedly for personal reasons. Earlier this month, UnitedHealth's stock hit a new 52-week low, falling 51% over the past six months.
Interestingly, UnitedHealth's Q2 results added to its challenges. The company missed earnings expectations, reporting $4.08 per share compared to the $4.45 forecast. Additionally, the company issued a weaker profit guidance for the full year. This new outlook factors in the company's performance in the first half of 2025 and expected increases in medical costs for the rest of the year.
Despite the challenges, UnitedHealth's steady revenue base, ongoing investments, and expectations for earnings growth in 2026 make it an attractive option for investors willing to look past short-term setbacks. However, cautious investors should monitor how the company manages cost pressures and carries out its plans going forward.
Which Healthcare Stock Is a Strong Buy, According to Analysts?
Using the TipRanks Stock Comparison tool, we compared these healthcare stocks. Among these companies, CVS stock has earned a Strong Buy rating from analysts, while UNH stock carries a Moderate Buy. In terms of share price appreciation, CVS's average stock price target of $81.75 offers an upside potential of 19% from current levels. In contrast, UNH's stock price forecast of $312.65 suggests a growth rate of just 1%.
Conclusion
Among the stocks, CVS currently stands out as the better investment option, according to analysts. It holds a stronger analyst rating, a higher projected upside, and has demonstrated solid recent performance with raised earnings guidance. While UNH remains a strong player with long-term potential, CVS's current momentum and outlook may offer a more appealing option for investors.
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