CVS Health Plans to Split in Two and Raises Its 2026 Profit Forecast

CVS Health said on Wednesday, November 4, that it intends to split into two independent, publicly traded companies, separating its drugstores from its insurance and pharmacy benefits businesses. On the same day it reported third-quarter revenue of $108.4 billion, up 5.4% from a year earlier, and raised its full-year profit forecast.

How the split would work

The plan follows a strategic review by the CVS Health board. Shareholders would end up owning shares in both companies:

CVS expects to complete the separation in the first half of 2028. The company intends to structure it as tax-free to CVS Health and its shareholders for U.S. federal income tax purposes. The deal still needs final approval from the board, an effective Form 10 registration statement with the SEC, and confirmation of the tax-free treatment, among other conditions.

“Our history is defined by proactively evolving to stay ahead of what's next in healthcare,” Joyner said in the announcement.

Third-quarter results

The year-earlier GAAP loss included a $5.7 billion goodwill impairment. By segment, Health Services revenue rose 9.5%, Health Care Benefits rose 2.4%, and Pharmacy & Consumer Wellness fell 2.0%.

Higher 2026 guidance

CVS now expects 2026 adjusted EPS of at least $8.20, up from a prior range of $7.90 to $8.10. It set its GAAP EPS forecast at a minimum of $6.98, compared with a prior range of $6.84 to $7.04, and raised its operating cash flow forecast to at least $15.5 billion, from at least $11.5 billion. The company said it is keeping a cautious view for the rest of the year because medical costs remain elevated.

How the stock reacted

CVS shares were down 2.43% early Wednesday, before the opening bell, according to TheStreet. By 1:02 p.m. ET they were down 12.15%, according to Stock Titan’s market tracker. Intraday prices can change quickly before the close.

What it means for investors

A split does not change what a shareholder owns on day one; it divides the same businesses into two stocks that can then trade on their own results. Nothing changes until the separation is completed, which CVS expects in 2028. Our guide on how to read an earnings report explains adjusted vs. GAAP earnings, and what market cap means helps when comparing the two future companies.

This article is for information only and is not investment advice.