CVS Health's (CVS) "strong" Q3 performance reinforces the company's position as a leading Medicare Advantage, or MA, carrier into the annual enrollment period, RBC Capital Markets said in a Thursday note.

The company reported Q3 non-GAAP earnings Wednesday of $1.60 per diluted share, up from $1.09 a year earlier, as revenue increased to $102.87 billion from $95.43 billion. RBC said the results reflect topline growth across the group and higher adjusted operating income driven by the health care benefits segment.

CVS Health raised its 2025 adjusted earnings guidance to between $6.55 and $6.65 per share, and management's initial commentary projects 2026 adjusted EPS of "just over $7 per share," RBC said. The initial estimate factors in ongoing momentum in Medicare Advantage, RBC added.

"Improving Medicare Advantage performance and industry leading 2026 Stars profile reinforce our belief that CVS is the best positioned MA carrier in our coverage," the investment firm said, noting CVS stock's discount compared with other leading MA carriers.

RBC raised its price target on CVS Health stock to $93 from $81, and reiterated its outperform rating.

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