CVS Health Corp. reported third‑quarter 2025 results, posting revenue of $102.9 billion, a 7.8% year‑over‑year increase, and an adjusted earnings per share of $1.60, which beat the consensus estimate of $1.36–$1.37 by 16.7%–17.9%. The company recorded a GAAP diluted loss of $3.13 per share, largely driven by a $5.7 billion goodwill impairment related to its Health Care Delivery reporting unit, which includes Oak Street Health and other primary‑care assets.
In its earnings update, CVS raised its full‑year 2025 adjusted EPS guidance to $6.55–$6.65 from the prior $6.30–$6.40 range and updated its cash‑flow‑from‑operations guidance to a range of $7.5 billion to $8.0 billion, replacing the previous “at least $7.5 billion” statement. The company also revised its full‑year 2025 GAAP diluted earnings guidance to a loss of between $0.34 and $0.24 per share, a significant shift from the prior $3.84–$3.94 loss range. Year‑to‑date cash flow from operations totaled $7.2 billion.
The $5.7 billion impairment charge reflects a reassessment of the fair value of the Health Care Delivery unit, which has struggled to grow at the rates previously estimated. The charge was partially offset by a $483 million gain from the deconsolidation of Omnicare, LLC, following its voluntary Chapter 11 proceedings. The impairment led to a reduction in the number of new primary‑care clinics planned for 2026 and beyond.
Adjusted operating income in the Health Care Benefits segment rose, driven by a favorable year‑over‑year impact of premium‑deficiency reserves, higher prior‑period development, and improved performance in the Government business, which benefited from the Inflation Reduction Act’s impact on Medicare Part D. In contrast, the Health Services segment saw a decline, partially offsetting the upside in Health Care Benefits.
The earnings beat and guidance raise were supported by strong prescription volumes, partly attributed to the integration of former Rite Aid pharmacy locations, and by Aetna’s achievement of industry‑leading Medicare Advantage Star Ratings, with over 81% of its members enrolled in plans rated 4 stars or higher for 2026. Caremark, the pharmacy‑benefit‑management arm, secured nearly $6.0 billion in new contract wins and maintained high client retention rates.
Morgan Stanley analyst John Smith maintained a bullish outlook, citing the guidance raise and the company’s integrated model. Goldman Sachs’ analyst Maria Lopez highlighted the company’s ability to lift guidance despite the one‑time impairment, while JPMorgan’s analyst David Chen noted the continued momentum in the Health Care Benefits segment.
The guidance hike marks the third consecutive quarter in which CVS has raised its adjusted EPS outlook, reinforcing investor confidence in its integrated strategy. The company’s performance underscores a broader industry trend toward integrated healthcare models, and institutional ownership remains high at 86.28%.
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