CVS vs. FMS: Which Healthcare Services Stock Has More Upside?

CVS Health has significantly outperformed Fresenius Medical Care (FMS) year-to-date, with its shares surging 82.5% compared to FMS's 20.3%, and trades at a more attractive forward price-to-sales ratio of 0.25. CVS's growth is driven by recent retail expansion, diversified business strength, and consistent upward earnings revisions, projecting 17.3% EPS growth for 2025. FMS, specializing in kidney care, is implementing its 'FME Reignite' strategy, targeting €1.05 billion in sustainable savings and mid-teens operating margins by 2030, with a projected 30.7% EPS growth for 2025 despite mixed estimate trends. However, CVS is currently considered the stronger investment due to its robust performance, valuation, and positive earnings outlook.

Analysis

CVS Health has significantly outperformed Fresenius Medical Care (FMS) year-to-date, with its shares surging 82.5% versus FMS's 20.3%. CVS also presents a more attractive valuation, trading at a forward P/S ratio of 0.25, below its five-year median, contrasting with FMS's 0.67. CVS holds a superior Value Score of A.

CVS's robust performance is driven by strategic retail expansion, including 63 former Rite Aid store acquisitions, adding over nine million patients. Its diversified segments, particularly Health Services, show strong execution, with health care delivery revenue growing 19% in Q2 2025. The company's 2025 EPS is projected to grow 17.3% with upward estimate revisions.

Fresenius Medical Care is executing its "FME Reignite" strategy, targeting €1.05 billion in sustainable savings by 2027 and a mid-teens operating margin by 2030. This includes significant annual capex and a lowered net financial leverage target. FMS projects a higher 2025 EPS growth of 30.7%, though estimates have shown a mixed trend.

Despite FMS's higher projected EPS growth, CVS's stronger share performance, consistent upward earnings revisions, and more favorable valuation position it as the stronger investment. FMS's strategic overhaul offers long-term potential, but its current valuation and mixed estimate trends warrant careful consideration.

Key Decisions for Investors

• Investors should consider CVS Health for its strong year-to-date performance, favorable valuation, and consistent upward earnings revisions, suggesting continued momentum.
• Monitor Fresenius Medical Care's execution of its "FME Reignite" strategy, particularly progress on sustainable savings and operating margin targets, as its long-term potential hinges on successful implementation.
• Evaluate FMS's mixed EPS estimate trends and higher valuation relative to its median, which may indicate higher near-term risk compared to CVS.