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Showstopper Healthcare Earnings Elevate Use Case for XLV

BY | ETF Database
9:13 am ET 08/05/26 | 5 VIEWS
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Wednesday, August 5th may have felt like an average Summer day, but it actually represented a compelling inflection point for the healthcare industry. This is because a few key healthcare giants reported their Q2 2026 results, showing that the industry still has plenty of gas left in the tank.Key Takeaways: Both Eli Lilly and CVS Health reported their Q2 2026 earnings on Wednesday, delivering results that soundly outpaced expectations. The healthcare giants also raised their 2026 guidance, with Eli Lilly anticipating revenue between $85 billion and $87 billion and CVS planning for at least $414 billion in revenue. With earnings this potent, the State Street Health Care Select Sector SPDR ETF (XLV A) is offering a stronger use case, given how it invests noticeably in both companies, especially Eli Lilly. Eli Lilly Produces Breakout Q2 Results, Elevated GuidanceTo get things started, Eli Lilly began the day on a high note. In its latest earnings report, the pharmaceutical giant resoundingly topped analyst expectations and even raised its full-year outlook. Eli Lilly’s adjusted earnings per share came in at $8.38, which is over $2 higher than what analysts were anticipating. Meanwhile, revenue for the quarter sat at $22.97 billion, which blew past analyst expectations by over $2 billion. Looking ahead, Eli Lilly is anticipating its 2026 revenue to total between $85 billion and $87 billion. This is a significant jump over the company’s previous expectations of 2026 revenue sitting between $82 billion and $85 billion. Of course, part of Eli Lilly’s success this quarter has to do with its weight loss and diabetes treatment drugs. For instance, weight loss drug Zepbound was responsible for $4.93 of Eli Lilly’s revenue this quarter. See More: Drug Pipeline Wins State Street Over on HealthcareNot Just Eli Lilly: CVS Delivers Similarly Strong EarningsEli Lilly wasn’t the only healthcare company that had a great Wednesday. CVS Health also posted its Q2 2026 earnings, and likewise blew past expectations and raised its annual guidance. CVS reported second quarter revenue of $106.10 billion. This is a significant jump over analyst projections of $100.11 billion for the quarter. Meanwhile, CVS reported adjusted earnings per share of $2.58 for the quarter, higher than the expected result of $1.85. Again, CVS has raised its expectations for how the year will play out. The pharmacy giant is now anticipating 2026 revenue to sit at at least $414 billion, up from previous projections of $405 billion. Not-so-coincidentally, CVS also announced a new collaboration with Eli Lilly. This collaboration will make Eli Lilly’s weight loss drugs Zepbound and Foundayo available for patients on the CVS Health app. See More: Coca-Cola Earnings Show the Potential of Consumer StaplesIs it Time to Focus on Healthcare Stocks?All in all, today’s developments showed the immense near-term and long-term potential within the healthcare industry. Not only are these companies posting strong results for the quarter, but they’re announcing new partnerships and amplifying their longer-term outlooks, creating a better buy case for concentrated healthcare exposure. These developments bode quite well for the State Street Health Care Select Sector SPDR ETF (XLV A). Offering focused exposure to the health care sector of the S&P 500, XLV invests in a variety of key players across the industry. These allocations include investments to both CVS and Eli Lilly, but XLV has a particularly heavy portfolio tilt towards Eli Lilly. As of August 4, 2026, about 15% of the fund’s portfolio is invested in the pharmaceutical giant. Staying engaged to both CVS and Eli Lilly could certainly pay off down the line. Demand for weight loss drugs likely won’t abate any time soon, and the health care industry can provide helpful diversification to create a balanced portfolio. For those looking for a low-cost means to ride this trend, XLV could certainly be worth a closer look. For more news, information, and analysis, visit our Sector Investing Content Hub.

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