Will Pharmacy and Consumer Wellness Segment Lead CVS' Q4 Earnings?

Core Viewpoint - CVS Health is set to report its fourth-quarter 2025 results on February 10, with expectations of continued revenue growth despite a projected decline in earnings per share [1][2]. Group 1: Earnings and Revenue Estimates - The Zacks Consensus Estimate for CVS's fourth-quarter revenues is $103.1 billion, indicating a 5.5% growth from the previous year [2]. - The earnings estimate for the fourth quarter is 99 cents per share, reflecting a 16.8% decrease compared to the same period last year [2]. - Earnings estimates have increased by 3.1% over the past 60 days, indicating positive sentiment leading up to the earnings announcement [3]. Group 2: Factors Influencing Performance - The Health Care Benefits segment is expected to face challenges due to elevated medical costs and pressures from the Medicaid business, which may impact revenue [4]. - Positive contributions to revenue may come from the government business, particularly due to the Inflation Reduction Act's effects on the Medicare Part D program [5]. - Aetna's integration of pharmacy prescriptions and medical procedures is anticipated to enhance operational efficiency and revenue in the Health Care Benefits segment [6]. Group 3: Segment Performance Insights - The Pharmacy & Consumer Wellness segment is likely to have driven revenue growth, supported by the Rite Aid acquisition and increased prescription volume [9]. - The Health Services segment is projected to see a 7.2% year-over-year revenue increase, despite some short-term headwinds affecting client contracts [12]. - The Pharmacy & Consumer Wellness segment is expected to grow by 9.8% in the fourth quarter, benefiting from a favorable pharmacy drug mix and higher prescription volumes [15]. Group 4: Strategic Developments - CVS has completed a review of its Oak Street clinic operations, leading to the closure of underperforming locations, which is expected to improve revenue [11]. - The company is also planning to reduce the number of new Oak Street clinics to focus on sustainable margins [11]. - CVS is actively offering updated COVID-19 vaccines across its locations, which is expected to positively impact revenues in the fourth quarter [14].