Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $108 billion | Not stated |
| Adjusted EPS | $2.09 | increase of over 30% from the prior year quarter |
| Adjusted Operating Income | $4.2 billion | Not stated |
| Cash Flow from Operations (YTD) | $15.3 billion | Not stated |
| Pharmacy & Consumer Wellness AOI | over $1.6 billion | increase of over 10% from the prior year |
Guidance and outlook
- Full year 2026 adjusted EPS guidance raised to at least $8.20.
- Full year 2026 cash flow from operations expected to be at least $15.5 billion.
- Full year 2026 total revenues expected to be at least $420 billion.
- 2027 adjusted EPS expected to be at least $8.65.
- Health Services segment 2027 adjusted operating income expected to be at least $7 billion.
How management sounded
Positive (+7 on our -10 to +10 scale). Management highlighted eight consecutive quarters of beating expectations and raised full-year guidance while announcing a strategic separation from a position of strength. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Separation Rationale
Asked: Why is the company splitting now?
Answer: Management stated the decision is made from a position of strength after eight quarters of beating expectations, allowing for better focus and capital allocation.
340B Business
Asked: What is the outlook for the 340B business in 2027?
Answer: Management expects the business to stabilize by the end of 2027 and noted it will be a smaller contributor to earnings than historically.
Share Repurchase
Asked: Will the separation impact capital deployment and share repurchases?
Answer: Management confirmed they expect both companies to be investment grade and do not see the separation hindering future capital deployment.
Medicare Advantage
Asked: What is the status of the Medicare Advantage margin recovery?
Answer: The business is moving into profitable territory in 2026 and management expects another year of margin expansion in 2027.
What to watch before the next call
- The progress of the separation transaction, which is expected to be completed in the first half of 2028.
- The performance of the Health Services segment as it navigates 340B headwinds and client membership attrition in 2027.
- The execution of the Medicare Advantage margin recovery plan as the company enters the 2027 payment year.
