What Did CVS Health’s Quarter Change For Its Stock?
For questions about this article or underlying research, email help@trefis.com.
On November 4, CVS Health (CVS) reported its fiscal Q3 2026 results. The stock fell 12.5% that day, while the S&P 500 rose 1.6%. That same morning, management announced a plan to separate CVS into two independent publicly traded companies and gave a first look at 2027. So did the quarter itself let investors down?
How Did CVS Health’s Quarter Compare With Forecasts?
The quarter came in well ahead of forecasts. CVS earned $2.09 a share on an adjusted basis, beating the $1.67 analysts expected. Revenue of $108 billion also topped the consensus estimate of $106 billion. Management also raised its full-year 2026 outlook for adjusted earnings per share to at least $8.20, from a range of $7.90 to $8.10.
Yet the stock moved in the opposite direction of similar companies. Elevance Health rose 4.9% on the day CVS fell, and UnitedHealth Group and Cigna gained as well. By the close on November 6, CVS was down 8.3% from its close before the report, while the S&P 500 had lost 2.5%. The fall came on a quarter that beat forecasts and lifted management’s own outlook.
Are CVS Health’s Earnings Still Recovering?
Against a year earlier, they are. Operating income for fiscal Q3 2026 came to $3.57 billion. That figure was up from $2.52 billion a year before, though it was lower than in the June quarter. Over the last twelve months, operating income reached $15.1 billion, compared with $10.7 billion for the twelve months before.
Management expects earnings to keep growing in 2027. The company now looks for at least $8.65 of adjusted earnings per share for 2027, up from the $8.45 floor it had talked about earlier. Management also expects another year of margin improvement at Aetna, its health insurance business. The exception is Health Services. For that segment, the company expects at least $7 billion of adjusted operating income in 2027, held back by a weaker selling season and the loss of members at health plan clients. Management called that year the low point for the segment’s earnings.
The other change is the split. CVS Health will keep Aetna, Caremark and Oak Street, while CVS Pharmacy will hold the retail pharmacy stores, mail order and MinuteClinic. Management expects the separation to be tax free for U.S. federal income tax purposes and completed in the first half of 2028. Management also called the one-time and stranded costs of the split manageable.
CVS Health’s Formal 2027 Outlook Comes In February
CVS is expected to report its fiscal Q4 2026 results in February 2027. Management said it will give formal 2027 guidance on that call, as it has in past years. Until then, the 2027 figures are a first look from a company that is also preparing to split in two. At that report, the number to watch is CVS’s formal 2027 guidance for adjusted earnings per share, set against the floor of $8.65 management gave in November.
Beyond CVS: A Systematic Way To Invest
Before you decide on CVS, consider a better choice. Since its September 2020 launch, the Trefis High Quality (HQ) Portfolio has returned 105%, ahead of a benchmark that combines the S&P 500, S&P MidCap and Russell 2000, without betting on one stock.
Spot an error or want more like this? Tell us in 10 seconds.