CVS Health's Turnaround Gains Momentum as Glenview Trims Stake Strategically

CVS Health’s first-quarter 2025 earnings report, marked by stronger-than-expected profitability and operational discipline, has underscored progress in its long-awaited turnaround. Yet the news is tempered by activist investor Glenview Capital’s decision to reduce its stake—a move that, while strategic, underscores the delicate balance between shareholder confidence and market volatility.

The quarter’s highlights included a 5.8% year-over-year revenue increase to $87.2 billion, driven by robust performance in its pharmacy benefits manager (PBM) and retail businesses. Crucially, medical costs in its health insurance division fell below expectations, enabling CVS to raise its full-year 2025 earnings guidance to $6.00–$6.20 per share, up from its prior $5.75–$6.00 range. This marks the second consecutive quarter of outperformance, signaling stabilization after years of missteps under prior leadership.

But the spotlight has now turned to Glenview Capital, the activist investor that first took a 1.3% stake in CVS in May 2024. The firm, which has long pushed for governance reforms and cost discipline, recently sold 3.75 million shares—31% of its original 12 million-share position. While the reduction could raise eyebrows, Glenview emphasized the move was purely portfolio management, not a loss of faith. “CVS remains our largest holding, and we remain fully committed to its long-term success,” stated Glenview CEO Larry Robbins in a public filing.

The stake reduction comes amid a year of transformative changes at CVS, many of which Glenview directly influenced. Key milestones include:
- Leadership Overhaul: CEO David Joyner’s appointment in October 2024 brought a focus on cost-cutting, customer-centricity, and accountability. Under Joyner, the company has slashed non-essential spending, exited non-core businesses, and strengthened its insurance reserves.
- Board Refreshment: The addition of four new directors, including Robbins himself, has injected fresh strategic rigor into decision-making.
- Operational Turnaround: The PBM division, a key profit engine, has seen margin improvements, while retail pharmacy sales grew 3.2% year-over-year, reflecting stronger foot traffic and prescription volumes.

Yet challenges persist. The insurance business, while showing cost discipline, remains exposed to medical inflation risks. Meanwhile, CVS has paused share buybacks until its debt levels improve—a cautious stance Glenview supports. “Capital allocation must prioritize deleveraging before rewarding shareholders,” Robbins noted.

The numbers tell a story of cautious optimism. reveals a 25% total return, outpacing the S&P 500’s 12% gain during the same period. This aligns with Glenview’s assertion that its investment has already delivered value.

Looking ahead, CVS’s success hinges on sustaining its margin improvements and executing its deleveraging plan. The company aims to reduce net debt by $2 billion in 2025, a target that appears achievable given its cash flow generation. However, medical cost trends in its insurance division could still introduce volatility.

In conclusion, Glenview’s partial exit reflects disciplined portfolio management rather than a retreat from CVS’s potential. The company’s Q1 results and strategic progress—bolstered by a restructured board, cost discipline, and operational focus—suggest it is on track to deliver on its $6.20 per share target. While risks remain, the 25% return for Glenview and the 6.2% year-over-year revenue growth in Q1 underscore that CVS is no longer the underperformer of yesteryear. For long-term investors, the question now is whether the disciplined execution can outpace lingering sector headwinds. The answer may well determine whether this stake reduction marks a tactical adjustment—or the start of a broader reallocation.

With its transformational steps and activist support, CVS Health is positioning itself to capitalize on its scale and customer reach. The path forward is clear, but the execution will define its future.