What Could Go Wrong At CVS Health From Here? Trefis Team Thu, November 12, 2026 at 2:07 PM EST 3 min read CVS +0.47% ^GSPC -0.23% UNH +0.53% CI -1.91% ELV +0.20% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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CVS Health (CVS) stock has returned 19.0% over the past twelve months, against 12.8% for the S&P 500. On its November 4 call, management raised its full-year 2026 outlook and announced a plan to split the company in two. Under the plan, CVS Health will retain Aetna, Caremark and Pharmacy Services, Specialty Pharmacy, Oak Street and Signify Health. The second company, CVS Pharmacy, will include the retail pharmacy stores, mail order, MinuteClinic and Health 100. Yet on the same call, management also cautioned about one of its businesses for 2027. So which business did management flag, and what did it say?
Management Flags A 2027 Low For Health Services
The Health Services segment runs CVS Health's pharmacy services and healthcare delivery businesses, and management said 2027 will be its low point for earnings. It expects the segment's adjusted operating income to be at least $7 billion in 2027, a figure that already includes a decline in its 340B business, which is part of its pharmacy services business. Management also named headwinds from a less robust selling season and from membership losses at its health plan clients.
In the third quarter of 2026, Health Services adjusted operating income rose nearly 3% from a year earlier, to $2.1 billion. Management said the rise came mainly from better purchasing economics and pharmacy drug mix. Continued price improvements for its pharmacy clients partly offset that gain.
How Large Is CVS Health's Health Services Segment?
Health Services is CVS Health's largest segment by revenue. It generated $190 billion in fiscal 2025, compared with $143 billion for Health Care Benefits, the next largest segment. Revenue rose 9.7% in fiscal 2025 following a 7.1% decline in fiscal 2024, meaning the business facing these headwinds had only just returned to growth.
Investors are not paying much for CVS Health's earnings. The stock trades at 10.4 times its trailing twelve-month earnings, against 21.9 for the S&P 500. On sales, it trades at 0.27 times, well below the 0.47 times it fetched at the end of 2016. That 2016 level was the highest of the past 40 quarter ends, and the lowest was 0.15 times at the end of 2024. On November 11, the shares closed 18.0% below their highest close of the past year, reached on July 21, 2026. At these levels, the price appears to assume far less from CVS Health than from the S&P 500 as a whole.
CVS Health Sees Health Services Growing Again After 2027
Management expects Health Services to return to growth after 2027, and it expects the 340B business to largely stabilize by the end of that year. Across the whole company, management expects adjusted earnings per share of at least $8.65 in 2027, about 13% above an adjusted 2026 baseline. That baseline sits below its raised 2026 guidance of at least $8.20, so the 2027 figure is about 5% above that guidance. That is a forecast, not a result, but management still expects company-wide earnings to grow in the year Health Services hits its low.
The threat is real, and management expects 2027 to be the segment's low point for earnings. It lands on the biggest segment, yet management expects that segment to grow again after 2027, and the price already appears to assume a business that grows slowly.
The figure to watch is Health Services adjusted operating income in CVS Health's formal 2027 guidance. Management plans to provide this outlook on its fourth-quarter call, expected in February 2027.
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