CVS Sheds Low-Performing Assets, Raises Profit Outlook

CVS Health Corp. (CVS) delivered third-quarter 2025 results that beat Wall Street forecasts, fueled by robust growth in its insurance and pharmacy divisions, and increased its annual earnings outlook for the third straight quarter. The company reported non-GAAP earnings per share (EPS) of $1.60, topping projections by $0.24, while revenue climbed 7.8% year-over-year to $102.9 billion, exceeding expectations by $4.07 billion,

. CVS also updated its 2025 adjusted EPS forecast to a range of $6.55 to $6.65, up from the previous $6.30 to $6.40, and now anticipates operating cash flow between $7.5 billion and $8 billion, .

The stronger performance was largely due to a rebound in CVS’s Aetna insurance business, which saw its medical benefit ratio drop to 92.8% from 95.2% a year earlier, indicating improved cost controls and more favorable premium reserves,

. CEO David Joyner pointed to the "multiyear Aetna recovery" as a major factor, noting that the business has stabilized following a leadership shakeup last year, . The 2024 acquisition of Rite Aid’s pharmacies also helped boost pharmacy segment revenue by 11.7%, thanks to higher prescription volumes and a broader customer base, .

On the downside, CVS took a $5.7 billion goodwill impairment charge tied to its Oak Street Health primary care clinics, which it now plans to scale back. Joyner announced that 16 clinics will close by February 2026, with no additional clinics opening that year, as the division failed to meet expectations, Bloomberg reported. Nevertheless,

reported operating cash flow of $7.2 billion so far this year, highlighting its financial strength, according to GuruFocus.

Shares initially slipped 1.5% in premarket trading after the earnings announcement, but the longer-term outlook remains optimistic. Analysts have raised their ratings, with a consensus "Outperform" recommendation, and CVS stock has gained nearly 30% since Joyner became CEO in 2024, Bloomberg reported. The updated guidance and improved operational efficiency have further bolstered investor sentiment, with the price-to-earnings ratio rising to 12 from 11 in the previous quarter, Finimize noted.

CVS’s results highlight its strategic pivot toward higher-margin insurance and pharmacy operations while shedding less profitable businesses. By emphasizing cost management and integrating Rite Aid’s assets, the company is working to strengthen its leadership in the changing healthcare sector.