CVS Health Delivers Confident Outlook After Q3 Performance, Stock Hits 52-Week High

Core Viewpoint - CVS Health Corp reported better-than-expected third-quarter earnings and raised its annual guidance, indicating strong performance across all segments [1][2]. Financial Performance - The company reported sales of $102.87 billion, surpassing the consensus estimate of $98.84 billion, with total revenues increasing by 7.8% year-over-year [2]. - Adjusted earnings per share were $1.60, exceeding the analyst estimate of $1.37, while the GAAP diluted loss per share was $3.13, impacted by a $5.7 billion goodwill impairment charge [2]. - Adjusted operating income rose by 35.8% to $3.46 billion, primarily due to growth in the Health Care Benefits segment [3]. Segment Performance - Revenues in the Health Care Benefits segment increased by 9.1% to $35.99 billion, driven by growth in the Government business, influenced by the Inflation Reduction Act [4]. - The Health Services segment saw sales increase by 11.6% to $49.27 billion, mainly due to pharmacy drug mix and brand inflation [6]. - The Pharmacy & Consumer Wellness segment's sales rose by 11.7% to $36.21 billion, supported by increased prescription volume and acquisitions from Rite Aid [7]. Membership and Metrics - The Medical benefit ratio improved to 92.8% from 95.2%, reflecting favorable developments in health care costs and performance in the Government business [5]. - Medical membership stood at 26.7 million, indicating a stable customer base [5]. - Prescriptions filled increased by 6.9% to 461.4 million, driven by higher utilization and Rite Aid acquisitions [7]. Guidance Update - CVS Health raised its fiscal 2025 adjusted earnings guidance to a range of $6.55-$6.65, compared to the previous range of $6.30-$6.40 [8]. - The company updated its cash flow from operations guidance to $7.5 billion to $8.0 billion, maintaining a minimum of $7.5 billion [8]. - GAAP diluted earnings (loss) per share guidance was revised to a range of $(0.34) to $(0.24), down from $3.84 to $3.94 [8]. Stock Performance - CVS Health shares increased by 2.14% to $83.96, reaching a new 52-week high [10].