CVS Health (NYSE:CVS) Stock Price Down 11.2% - Here's Why

Key Points

• CVS shares fell 11.2% after the company announced plans to split its retail pharmacy business from its insurance and pharmacy-benefit operations, targeting completion in the first half of 2028. Investors appear concerned about execution, debt allocation and losing the advantages of an integrated business.
• CVS beat third-quarter estimates, reporting adjusted EPS of $2.09 and revenue of $108.4 billion, up 5.4% year over year.
• Management raised its 2026 adjusted EPS outlook to at least $8.20 and cash flow guidance to at least $15.5 billion.

CVS Health Corporation (NYSE:CVS - Get Free Report) shares fell 11.2% during mid-day trading on Wednesday. The stock traded as low as $77.33 and last traded at $81.1960. Approximately 6,524,275 shares were traded during trading, a decline of 21% from the average daily volume of 8,306,744 shares. The stock had previously closed at $91.41.

Trending Headlines about CVS Health

Here are the key news stories impacting CVS Health this week:

• Positive Sentiment: CVS reported third-quarter adjusted earnings of $2.09 per share and revenue of $108.4 billion, both ahead of analyst estimates. Revenue increased 5.4% year over year. CVS Q3 results and guidance
• Positive Sentiment: Management raised its 2026 outlook, including adjusted EPS guidance to at least $8.20 from a prior range of $7.90–$8.10, and operating cash flow guidance to at least $15.5 billion from at least $11.5 billion. CVS Q3 results and guidance
• Neutral Sentiment: CVS plans to separate its retail pharmacy business from its insurance and pharmacy-benefit operations into two public companies, with completion targeted for the first half of 2028. CVS says the businesses should have investment-grade ratings and strong free cash flow, but the benefits will depend on execution. CVS separation announcement
• Negative Sentiment: The separation reverses CVS’s strategy of combining pharmacy, benefits and insurance operations. Investors appear concerned about the breakup’s execution, allocation of debt and the loss of potential advantages from operating as an integrated healthcare company; the plan weighed on the stock despite the earnings beat. Market reaction to CVS split plan

Analyst Upgrades and Downgrades

CVS has been the subject of several research analyst reports. Robert W. Baird set a $107.00 target price on shares of CVS Health in a research report on Thursday, August 6th. Piper Sandler set a $112.00 price target on shares of CVS Health in a research note on Wednesday, September 9th. Raymond James Financial restated an "outperform" rating and issued a $120.00 price objective on shares of CVS Health in a report on Wednesday. JPMorgan Chase & Co. lifted their price objective on CVS Health from $111.00 to $118.00 and gave the company an "overweight" rating in a research report on Wednesday, August 12th. Finally, Sanford C. Bernstein reiterated an "outperform" rating and set a $112.00 target price on shares of CVS Health in a report on Wednesday, September 9th. Twenty-one investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat.com, CVS Health currently has an average rating of "Moderate Buy" and a consensus target price of $109.74.

CVS Health Trading Down 12.2%

The firm has a market capitalization of $102.64 billion, a PE ratio of 21.24, a P/E/G ratio of 0.82 and a beta of 0.58. The firm has a 50 day simple moving average of $91.08 and a 200 day simple moving average of $88.87. The company has a current ratio of 0.87, a quick ratio of 0.66 and a debt-to-equity ratio of 0.74.

CVS Health (NYSE:CVS - Get Free Report) last posted its earnings results on Wednesday, November 4th. The pharmacy operator reported $2.09 EPS for the quarter, topping analysts' consensus estimates of $1.65 by $0.44. CVS Health had a net margin of 1.18% and a return on equity of 13.12%. The business had revenue of $108.40 billion during the quarter, compared to the consensus estimate of $104.69 billion. During the same quarter in the previous year, the firm posted $1.60 EPS. The firm's revenue was up 5.4% on a year-over-year basis. Equities analysts expect that CVS Health Corporation will post 8.02 earnings per share for the current fiscal year.

CVS Health Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, November 2nd. Shareholders of record on Thursday, October 22nd were issued a dividend of $0.6650 per share. The ex-dividend date of this dividend was Thursday, October 22nd. This represents a $2.66 dividend on an annualized basis and a yield of 3.3%. CVS Health's dividend payout ratio (DPR) is currently 70.37%.

Institutional Investors Weigh In On CVS Health

Several institutional investors and hedge funds have recently modified their holdings of the stock. Kilter Group LLC bought a new position in CVS Health during the second quarter valued at approximately $27,000. J.Safra Asset Management Corp bought a new stake in CVS Health in the 2nd quarter worth approximately $30,000. Beaird Harris Wealth Management LLC raised its holdings in shares of CVS Health by 201.0% during the 2nd quarter. Beaird Harris Wealth Management LLC now owns 292 shares of the pharmacy operator's stock worth $30,000 after acquiring an additional 195 shares in the last quarter. Timbuktu Capital Management LLC purchased a new stake in shares of CVS Health during the 2nd quarter worth approximately $31,000. Finally, Dunhill Financial LLC bought a new position in shares of CVS Health during the 2nd quarter valued at approximately $32,000. Institutional investors own 80.66% of the company's stock.

About CVS Health

CVS Health Corporation NYSE: CVS is a diversified health care company that provides pharmacy, insurance and health services in the United States. Its businesses serve consumers, employers, health plans and health care providers through pharmacies, benefit programs, insurance coverage and clinical care services.

The company's Pharmacy Services segment, led by CVS Caremark, manages prescription drug benefits for employers, insurers and government programs. CVS Pharmacy operates retail pharmacies and health-focused stores that dispense prescriptions and offer over-the-counter products, health and wellness merchandise, immunizations and related services.

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