CVS Beats Q3, Raises Outlook and Plans Two-Company Split

CVS Health (CVS) beat third-quarter 2026 estimates, raised its full-year outlook and announced plans to separate into two independent public companies. Revenue rose 5.4% to $108.4 billion, above the $104.75 billion estimate, while adjusted earnings per share increased 31% to $2.09 versus $1.65 expected.

Q3 scorecard

By our calculation, adjusted EPS beat by $0.44, or about 27%, and revenue beat by about 3.5%. The new $8.20 floor for 2026 adjusted EPS is $0.20 above the midpoint of the prior $7.90–$8.10 range.

Segment performance

• Health Care Benefits. Adjusted operating income rose to $912 million from $314 million as the medical benefit ratio improved to 91.3% from 92.8%. Revenue increased 2.4% to $36.86 billion.
• Health Services. Revenue rose 9.5% to $53.96 billion, and adjusted operating income grew 2.7% to $2.11 billion.
• Pharmacy & Consumer Wellness. Revenue fell 2.0% to $35.5 billion, while adjusted operating income rose 10.6% to $1.64 billion.

The separation plan

• Structure. CVS intends to separate into two independent, publicly traded companies in a transaction intended to be tax-free to the company and its shareholders, with completion expected by the first half of 2028.
• Healthcare solutions company. It would hold Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, and would be called CVS Health in the interim.
• Retail pharmacy and community healthcare company. It would hold about 9,000 CVS pharmacies, mail pharmacy, MinuteClinic and the Health100 technology services business.

Profit, cash flow and outlook

• GAAP result. GAAP diluted EPS was $1.68 versus a $3.13 loss a year earlier, which included a $5.7 billion goodwill impairment. A $193 million Omnicare guarantee charge, or $0.15 per share, was excluded from adjusted results.
• Cash flow. Operating cash flow reached $15.3 billion in the first nine months, up from $7.2 billion a year earlier.
• Outlook. CVS raised 2026 adjusted EPS guidance to at least $8.20 from $7.90–$8.10, above the $8.04 estimate. It now expects GAAP EPS of at least $6.98, revenue of at least $420 billion and operating cash flow of at least $15.5 billion, up from at least $11.5 billion. The company cited elevated cost trends and potential macro headwinds.

What to watch

• Separation details. Leadership, capital structure and the timeline for each company ahead of the 2028 target.
• Medical costs. Whether the medical benefit ratio keeps improving as elevated cost trends persist.
• Guidance. Whether the outlook rises again if Health Care Benefits keeps outperforming.
• Related coverage. See our reports on CVS's pre-earnings spin-off talks, Omega Healthcare, IDEXX and QuidelOrtho.

Sources: Results and the separation plan are from CVS Health's Nov. 4 company release and Form 8-K. Estimates are consensus figures. Items labeled by our calculation are our own arithmetic. This article is informational only and is not investment advice.