CVS Health 2025 Q3 Earnings Sharp Net Loss Amid Raised Guidance

CVS Health reported Q3 2025 results that exceeded revenue and EPS estimates while raising full-year guidance for the third time. Despite a $5.7 billion goodwill impairment, the company demonstrated strong operational performance and strategic realignment.

Revenue

Total revenue surged 7.8% to $102.87 billion, driven by robust demand across core segments. The company’s diversified healthcare model, spanning retail pharmacy, PBM, and insurance, supported this growth.

Earnings/Net Income

CVS swung to a GAAP net loss of $3.99 billion, including a $5.7 billion impairment charge, versus $71 million profit in 2024 Q3. Adjusted EPS rose to $1.60, reflecting disciplined cost management and segment performance. While GAAP results were challenging, adjusted metrics underscore operational resilience.

Price Action

Shares fell 3.4% pre-earnings but gained 6.66% month-to-date. Analysts remain cautiously optimistic, with a target price of $84.82 and Zacks Rank #3 (Hold). Technical indicators suggest the stock nears overbought territory, while valuation metrics highlight potential overvaluation.

Post-Earnings Price Action Review

The stock’s pre-market dip reflected short-term disappointment from the GAAP loss, though mixed analyst sentiment and strong revenue growth limited further declines. Institutional ownership remains high at 86.28%, while insider selling continued. Technical indicators like RSI (67.98) signal caution, aligning with the Zacks Rank’s “Hold” recommendation. Market participants await clarity on margin recovery in Aetna and Health Care Delivery segments.

CEO Commentary

CEO J. Joyner highlighted $3.5 billion adjusted operating income and raised full-year EPS guidance to $6.55–$6.65. Strategic exits, like the individual exchange market, and Rite Aid asset acquisitions were emphasized. Oak Street Health’s slower growth necessitated the goodwill impairment, though value-based care and PBM innovations remain priorities.

Guidance

CVS raised 2025 adjusted EPS to $6.55–$6.65 and projected $397 billion in revenue. For 2026, mid-teens EPS growth is expected post-adjusting for $0.45 of prior-year items. Aetna margin improvement and PBM growth are key focus areas amid near-term reimbursement pressures.

Additional News

1. Goodwill Impairment: CVS recorded a $5.7 billion impairment in Health Care Delivery, attributed to slower Oak Street Health clinic growth.

2. Strategic Realignment: The company exited the individual exchange market and acquired Rite Aid assets to strengthen its retail pharmacy footprint.

3. Leadership Focus: CEO Joyner emphasized margin recovery in Aetna and Health Care Delivery, with cautious optimism for 2026.

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