CVS Health forecasts double-digit earnings growth for 2026

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By Amina Niasse and Mariam Sunny

NEW YORK (Reuters) -CVS Health projected double-digit earnings growth for 2026 on Wednesday after raising its 2025 profit forecast for the third time, showing steady progress in its turnaround efforts.

CVS said it foresees mid-teens percentage profit growth versus 2025. It said it will announce a more detailed outlook in December.

CVS also recorded a $5.73 billion writedown tied to its healthcare delivery businesses, including in-pharmacy MinuteClinics, Oak Street Health, and Signify Health.

The charge reflects both a restructuring of Oak Street, which provides primary care, and diminished value of Signify Health, which offers home-based services. Both focus on government-backed Medicare programs for older adults and people with disabilities.

In his first year as CEO, David Joyner has spearheaded a much-needed turnaround for CVS, laying out elaborate cost-cut plans, exiting underperforming markets and strengthening top management to revive investor confidence.

“While we are encouraged by our progress, we maintain a disciplined and cautious outlook as we position our business for another year of strong performance in 2026,” Joyner said during a conference call to discuss results.

Shares of CVS, which operates one of the largest U.S. pharmacy chains, Aetna insurance and the CVS Caremark pharmacy benefit manager, rose as much as 3.6% before paring the gains.

For full-year 2025, CVS now expects to record a profit of $6.55 to $6.65 per share, up from its prior view of $6.30 to $6.40 per share, and well ahead of Wall Street estimates of $6.38, compiled by LSEG. 

“While turnarounds are messy, the core elements of CVS’s turnaround appear to be performing,” Bernstein analyst Lance Wilkes said, referring to progress in the Aetna business and the strong market position for its retail pharmacies despite broader industry challenges.

CVS and peers like UnitedHealth Group have highlighted persistently elevated costs in their government-backed health plans due to increased utilization of medical services and changes in government reimbursement. Despite these pressures, the insurers have managed to keep expenses broadly in line with both internal expectations and Wall Street forecasts.

Joyner said the improved full-year forecast reflected new customers acquired from its purchase of some Rite Aid prescription files, and in its Caremark pharmacy benefit business. 

The company is conservatively managing risks around its health insurance and healthcare delivery units, Joyner said in an interview.

“We are taking a cautious and prudent look in terms of where healthcare trends have been and where we expect them to continue to be elevated as we head into 2026,” he said.

Separately, CVS took an $83 million charge to cover the closure of 16 Oak Street clinics and said it planned to reduce the number of new primary care clinics it would open in 2026 and thereafter.

“Our thesis for that business (was) that we were going to grow, and then we were going to be driving the patient growth inside the business,” Joyner said. “The markets changed.”

ANOTHER QUARTERLY BEAT

CVS reported an adjusted quarterly profit of $1.60 per share, topping analysts’ average estimate by 23 cents, according to LSEG data. That marks a fourth consecutive quarter of CVS exceeding Wall Street profit estimates.

CVS shares are up nearly 85% so far in 2025, recovering from an over 43% slump last year, when it repeatedly fell short due to medical costs in its Aetna insurance business.

“With the stock having a strong year, up over 75%, the bar was pretty high to have a significant move to the upside, even with the beat and raise similar to what we have seen here,” said Christian Greiner, senior portfolio manager at F/m Investments.

Aetna reported a medical loss ratio – or the percentage of premiums spent on medical services – of 92.8%, in line with analysts’ estimates, but higher than the prior quarter’s 89.9%.

CVS was able to fill more prescriptions and dispense more expensive drugs after the addition of about 9 million Rite Aid customers, driving pharmacy chain revenue 11.7% higher to $36.2 billion.

The healthcare conglomerate reported a net loss of $3.13 per share for the third quarter due to the large charges taken.

(Reporting by Amina Niasse in New York and Mariam Sunny in Bengaluru; Editing by Caroline Humer and Bill Berkrot)