CVS Health Corp.

CVS Health generated over $106 billion of revenue in the quarter, up more than 7% year over year, and approximately $5.2 billion of adjusted operating income, up 35%. Adjusted EPS was $2.58, more than 40% above the prior year quarter. By segment, Health Care Benefits revenue was over $37 billion with adjusted operating income of about $2.4 billion and an 87.4% medical benefit ratio; Health Services revenue was nearly $52 billion with adjusted operating income of over $1.7 billion; and Pharmacy and Consumer Wellness revenue was nearly $34 billion with adjusted operating income of nearly $1.5 billion. For 2026, CVS raised adjusted EPS guidance to $7.90-$8.10, increased total revenue guidance to at least $414 billion, lifted Health Care Benefits adjusted operating income guidance to $5.03 billion-$5.37 billion, raised Pharmacy and Consumer Wellness adjusted operating income guidance to at least $6.4 billion, reiterated Health Services outlook, and increased cash flow from operations guidance to at least $11.5 billion.

David Joyner framed the quarter as evidence that CVS is delivering on a multi-year turnaround across the enterprise, saying each operating segment grew earnings and exceeded expectations. He emphasized CVS's strategy of simplifying access to care, using technology and AI to reduce friction for consumers and providers, and leveraging GLP-1, pharmacy, and care delivery assets together. His tone was confident and constructive, repeatedly highlighting momentum, trust-building, and the company's ability to capture opportunities regardless of how consumers access care.

Brian Newman highlighted broad-based year-over-year improvement: revenue above $106 billion, adjusted operating income of about $5.2 billion, adjusted EPS of $2.58, and year-to-date operating cash flow of approximately $10.6 billion. He pointed to stronger Health Care Benefits results, including about $2.4 billion of adjusted operating income and an 87.4% MBR, and said the company remained confident in reserves; he also noted Health Services benefited from drug mix and purchasing economics, while PCW saw core pharmacy strength despite reimbursement pressure. On capital allocation, he said the company returned over $1.7 billion in dividends year to date, ended with about $2.7 billion of cash at the parent and unrestricted subsidiaries, carried leverage of about 3.5x, and is assuming no share repurchases this year beyond offsetting dilution.

Analysts pressed on the 2027 outlook, especially 340B pressure, Caremark membership declines, Medicare Advantage bids, Part D, retail sustainability, and the pace of technology investments. Management said 2027 commentary was pulled forward because of known headwinds, but reiterated confidence in mid-teens EPS CAGR through 2028 and said a floor of at least $8.44 for 2027 EPS appeared reasonable versus current consensus. On 340B, executives said manufacturer restrictions and some specialty-drug genericization are creating pressure, but specialty pharmacy, generic penetration, and biosimilar efforts such as Cordavis can offset some of it; on retail, they said CostVantage, better service, and script growth above market should support a more consistent margin profile. Management also said Medicare MA is ahead of expectations, Part D is in line, and AI/technology investments are already improving claims processing, prior auth, pharmacist time and provider experience.