The Motley Fool on $CVS (Nov 4, 2026)

We're going to talk today about AMD and also a split at CVS, but we have to start with the news of the day.

When we come back, we're going to get to CVS going from consolidator to deconolidating. For decades, it seems like CVS has been in consolidation phase, adding more and more stores.

Then they got into the insurance business, but that hasn't worked particularly well for investors. The stock's up just 5% in the past decade.

Rachel, this morning they announced that they're going to be splitting the company into two. What do we need to know? And is this is this the kind of move that's going to ultimately work out?

Yeah, so they're going to split into two separate publicly traded companies. This is very much kind of unwinding what has been really a decadesl long uh vertical consolidation strategy.

I mean, one of the most notable examples of this was back in 2018 when they acquired Etna. I I think they're seeing the writing on the wall that trying to be, you know, the quarter drugstore, medical provider, insurance giant all at once, that has not created long-term shareholder value.

Well, that that's what some said, right? No. Yeah. This this has been honestly a very very difficult few years for CVS. I'm not particularly surprised that they've announced this plan.

I think it very much remains to be seen what kind of value it will create.

But essentially the separation plan, it's supposed to conclude by early 2028. So they're going to have CVS pharmacy. That'll be the retail focus side, right, with the thousands of brick-andmortar drugstores, the minute clinics, pharmacy operations.

Then they'll have CVS Health that's going to bundle uh the pharmacy benefit manager, Caremark, Etna, and then their premium care assets into one.

One of the reasons they've had such a difficult time the last few years, so the integrated PBM and insurance models have been under a lot of legislative scrutiny in Washington over rising healthcare costs.

So maybe there's this idea that a clean break could unlock trapped shareholder value.

But even the standalone retail pharmacy side, they're in a really long-term secular battle against, you know, the digital uh giants like Amazon, the insurance side, is seeing surging utilization costs, shifting government reimbursement models.

So, I'm not necessarily sure that either of these two companies are are ones that I would want to be a buyer of uh even in their standalone state.

But certainly, I do think that splitting the company in two makes sense. Maybe one ends up becoming an acquisition target. That remains to be seen. Yeah, Lou, this this seems to be one of these deals that it just never works out well for consumers and CVS kind of became quasi monopoly.

Uh you know, depending on where you're at, maybe you maybe are lucky and you have a Walgreens sitting next to a CVS. Uh but you know, they consolidated more and more power as you get into insurance.

You get kind of siloed. Seems like that just didn't work out well as it hasn't for a lot of these companies over the past decade or two.

This is I mean look healthcare in this country is a mess period and I think CBS is I mean they they I think were trying to solve some of that mess with some of the deals they did and they just created new messes because look at the end of the day there's a fine line between synergies and conflicts of interest and when you're dealing with someone's life versus like you know just the price of an aircraft engine vertical integration takes on new vibes then and have political consequences and a lot of consequences.

is uh they might have been getting a kind of ahead of the politics here. Uh not just kind of with this election, but it just there's kind of bipartisan support that owning botharmacies and the pharmacy benefit managers doesn't isn't good for consumers.

I, you know, Rachel's probably right. I'm not going to buy either of these. Uh CVS Pharmacy, we saw how this worked out for Walgreens. They're not public anymore. I doubt that CVS Pharmacy is destined to be a public company long term.

CVS Health, who knows? I think the combination of the insurance PBM and these senior clinics which I think are very important to the story just because of the Medicare exposure.

Maybe there's a good business there. I think that's more intriguing.