News about spin-offs

CVS Health plans to split into two public companies by early 2028, reversing its $78 billion acquisition of insurer Aetna and dismantling the vertically integrated model it built in 2018, in what would be one of the largest corporate splits in history. About 9,000 retail pharmacies would be separated from the insurance business and pharmacy benefit manager Caremark, with the CVS Health name retained by the company run by CEO David Joyner, and existing shareholders would own shares in both companies. The move comes as Joyner's turnaround, which includes $2 billion in cost cuts, store closures and leadership changes, shows substantial progress, with shares up roughly 70% since October 2024 and market value at $117 billion. In 2025, the pharmacy business generated $37.66 billion in sales, the insurance unit $36.29 billion in revenue and healthcare services $51.24 billion. Leerink Partners analyst Michael Cherny said the split feels like a complete shock, but that the outlook for a standalone retail pharmacy may now be stronger, and that the rationale could include avoiding state scrutiny of vertical integration.

FedEx reports fourth-quarter results on Wednesday, Oct. 28, after the bell, its first report since the June 1 Freight spinoff and its switch to a calendar fiscal year. Adjusted EPS of $6.31 beat the $5.95 consensus, marking five straight EPS beats, while revenue rose 12.5% to $25.01 billion. Operating income fell 21.94% as $205 million in Freight separation costs weighed on results. Interim CFO Claude Russ said Q3 will be the seasonally weakest quarter, with a $200 million pilot-contract drag on margins. Network 2.0 aims to route 65% of eligible volume through optimized stations before peak, targeting $2 billion in savings by the end of 2027.

Jim Cramer's Charitable Trust is exiting its remaining stake in Honeywell Technologies (HON), selling 110 shares at roughly $209 each for a loss of about 3%. The sale followed a roughly 1% gain on Wednesday, when the stock bucked a broader market decline after the industrial automation company unveiled Forge Cognition, an AI platform built with technology from Nvidia and Dell. The trust had already halved the position last month and downgraded its rating. The author also argues that 2027 EPS estimates for the company may be too high: assuming 2026 EPS of $8.35 (the high end of guidance) and 15% growth, 2027 earnings would be about $9.60, below the $9.81 consensus per LSEG. Because stocks tend to struggle as estimates fall, and the company has yet to benefit from its spin-off from Honeywell Aerospace, the trust decided to exit.