What Happened?
Shares of diversified healthcare company CVS Health (NYSE: CVS) fell 4.3% in the morning session after the company reported a significant $5.7 billion goodwill impairment charge related to its Health Care Delivery business, which overshadowed otherwise strong third-quarter results.
Although CVS Health posted record-high total revenues of $102.9 billion for the quarter, the massive write-down led to a reported GAAP loss of $3.13 per share. This charge stemmed from the reduced value of its Oak Street Health primary care facilities, which the company acquired in 2023. The write-down prompted the company to lower its full-year guidance for GAAP diluted earnings per share. Despite the company raising its forecast for adjusted earnings, investors appeared to focus on the large impairment charge, which raised concerns about the profitability of its recent acquisitions.
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What Is The Market Telling Us
CVS Health’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 16.4% on the news that the company reported fourth-quarter results that exceeded expectations, with same-store sales significantly surpassing analysts' forecasts and EPS outperforming Wall Street's estimates by a wide margin. Growth was powered by strong performance in the Pharmacy & Consumer Wellness segment. On the other hand, its full-year EPS guidance missed. Despite this, we think this was a decent quarter.
CVS Health is up 73.5% since the beginning of the year, and at $76.71 per share, it is trading close to its 52-week high of $83.04 from October 2025. Investors who bought $1,000 worth of CVS Health’s shares 5 years ago would now be looking at an investment worth $1,368.
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