CVS Health announced plans to split into two publicly traded companies by the first half of 2028, separating its retail pharmacy business, including roughly 9,000 retail locations, from its Aetna insurance business and its pharmacy benefit manager, Caremark. Analysts say the economics have changed, as retail pharmacy profits have become more consistent and Aetna has improved despite high medical costs in Medicare Advantage plans. CEO David Joyner said the company has beaten earnings estimates for eight consecutive quarters, cut $2 billion in costs and expects at least $15.5 billion in operating cash flow in 2026, up roughly 70% from $9.1 billion in 2024. Shares fell about 12% on the announcement, and the retail unit's adjusted operating margin of roughly 4% to 5% may keep it valued at a discount. Caremark also faces growing state-level scrutiny of its PBM practices.
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