CVS Health (CVS) official guidance

Building on this strong performance so far this year, we are raising our full year 2026 adjusted earnings per share guidance by $0.60 to a range of $7.90 to-$8.10.

While we would not normally comment on 2027 consensus this early in the year, an outlook of at least $8.44 consistent with current consensus appears reasonable at this juncture.

As you can see, we are making meaningful progress unlocking our embedded earnings power and continue to feel confident in the mid-teens adjusted EPS CAGR from 2025 through 2028 that we laid out at our recent investor day.

We now expect a full year MBR of 89.75%, ±25 basis points.

Additionally, we believe we will see membership declines in Caremark next year.

We are also updating our full year expectation for cash flow from operations to at least $11.5 billion, a meaningful increase of $2 billion from our prior guidance.

In our Health Benefits segment, we now expect full-year adjusted operating income to be in a range of $5.03 billion-$5.37 billion, an increase of over $1 billion relative to our prior guidance.

In our Pharmacy and Consumer Wellness segment, we now expect full-year adjusted operating income of at least $6.4 billion, an increase of $220 million from our prior guidance.

In aggregate, we now expect full-year enterprise adjusted operating income to be in the range of $16.58 billion-$16.92 billion.

We think this business, combined with our leading STARS scores, is going to be well positioned to make that continued progress towards the appropriate margins in 2027, but also delivering a great experience and good health outcomes for our members.

We now also expect our full year total revenues to be at least $414 billion.

| Acquisition-related integration costs | 80 | | 0.06 | | 80 | | 0.06 |

| Amortization of intangible assets | 1,730 | | 1.34 | | 1,730 | | 1.34 |

| Weighted average diluted shares outstanding | | | 1,289 | | | | 1,289 |

◦GAAP diluted EPS guidance range to $6.84 to $7.04 from $6.24 to $6.44

| Net income attributable to CVS Health (GAAP measure) | $ | 8,810 | $ | 6.84 | $ | 9,065 | $ | 7.04 |

| Adjusted income attributable to CVS Health (2) | $ | 10,186 | $ | 7.90 | $ | 10,441 | $ | 8.10 |

| Net realized capital losses | 29 | | 0.02 | | 29 | | 0.02 |

| Tax impact of non-GAAP adjustments | (463) | | (0.36) | | (463) | | (0.36) |

Yeah, I'll just reaffirm our confidence in hitting target margins in 2028.

And so this is a strong business for us, and it remains strong. I think the overperformance and growth that we saw in 2025 and then as we will continue to grow in 2026, it's a result of better than expected retention and just the innovative products and the approach that we're taking with these very sophisticated purchasers of healthcare, offering leading technology and solutions that they've been looking for.

Then lastly, in commercial, we've maintained pricing discipline. As a result, I think you can expect performance in 2026 will remain strong.

We have a clear line of sight to improved performance and healthcare delivery in Oak Street Health in 2026, and we'll continue to make progress in future years.

This business is going to advance towards its recovery to target margin in 2026.

We expect stable margins in our Medicaid business.

In Medicare, we expect another year of margin improvement driven by a rational discipline approach to pricing in our individual and PDP products and repricing in our group MA business.

And finally, CVS Pharmacy exceeded expectations in 2025 and established a new trajectory of at least flat earnings annually starting in 2026.

•Raised GAAP diluted earnings (loss) per share guidance range to $(0.32) to $(0.22) from $(0.34) to $(0.24)

•Raised Adjusted EPS guidance range to $6.60 to $6.70 from $6.55 to $6.65

CVS Health expects to achieve a mid-teens Adjusted EPS CAGR through 2028 driven by continued strong performance from its unique collection of businesses, underpinned by best-in-class innovation and technology.

•Confirmed cash flow from operations guidance range of $7.5 billion to $8.0 billion

•Raised GAAP operating income guidance range to $4.37 billion to $4.54 billion from $4.29 billion to $4.46 billion

•GAAP operating income guidance range of $13.26 billion to $13.60 billion

•Raised adjusted operating income guidance range to $14.22 billion to $14.39 billion from $14.14 billion to $14.31 billion

•Raised total revenues guidance to at least $400.0 billion from at least $397.3 billion

Additionally, we now expect our full-year adjusted effective tax rate to be 25.3%, an improvement of 40 basis points.

Altogether, and after adjusting for these items, we currently expect a reasonable starting point for our 2026 adjusted EPS guidance to reflect mid-teens growth.

We continue to project our full-year 2025 medical benefit ratio at the low end of our healthcare benefits adjusted operating income guidance range to be approximately 91%.

In our healthcare benefits segment, we now expect full-year adjusted operating income of approximately $2.72 billion at the low end of our guidance range, an increase of approximately $300 million, reflecting our performance in the third quarter and improved expectations for the remainder of the year.

In our health services segment, we now expect full-year adjusted operating income of at least $7.1 billion, a decrease of approximately $240 million from our prior guidance.

Lastly, in our pharmacy and consumer wellness segment, we now expect full-year adjusted operating income of at least $5.95 billion, an increase of approximately $270 million from our prior guidance.

Altogether, we expect the segment to deliver low single-digit adjusted operating income growth next year.

Yeah, no, just Justin, in terms of the outlook, the strong performance Prem talked about in the quarter, we lifted our guide for the segment, and it's now sitting at a growth of 3% for the year.

| Acquisition-related integration costs | 150 | | 0.12 | | 150 | | 0.12 |

| Amortization of intangible assets | 2,000 | | 1.57 | | 2,000 | | 1.57 |

| Adjusted weighted average diluted shares outstanding (non-GAAP) (2) | | | 1,270 | | | | 1,270 |

| Weighted average diluted shares outstanding | | | 1,267 | | | | 1,267 |

| Gain on deconsolidation of subsidiary | (483) | | (0.38) | | (483) | | (0.38) |

| Goodwill impairment | 5,725 | | 4.50 | | 5,725 | | 4.50 |

| Health Care Delivery clinic closure charge | 83 | | 0.07 | | 83 | | 0.07 |

| Legacy litigation charges | 1,220 | | 0.96 | | 1,220 | | 0.96 |

| Loss on Accountable Care assets | 288 | | 0.23 | | 288 | | 0.23 |

| Net loss attributable to CVS Health (GAAP measure) | $ | (432) | $ | (0.34) | $ | (307) | $ | (0.24) |

| Adjusted income attributable to CVS Health (2) | $ | 8,320 | $ | 6.55 | $ | 8,445 | $ | 6.65 |

| Net realized capital losses | 59 | | 0.05 | | 59 | | 0.05 |

| Office real estate optimization charges | 10 | | 0.01 | | 10 | | 0.01 |

| Opioid litigation charge | 320 | | 0.25 | | 320 | | 0.25 |

| Tax impact of non-GAAP adjustments | (620) | | (0.49) | | (620) | | (0.49) |