CVS Health Corp (NYSE:CVS) stock rose 0.43% (As on November 3, 11:39:36 AM UTC-4, Source: Google Finance) after the company forecast a 2023 profit below Wall Street estimates and said it hoped to mitigate the hit from a performance rating decline for its most popular Medicare plan by encouraging members to shift to other plans. Adjusted operating income increased $160 million in the three months ended September 30, 2022 compared to the prior year. The increase in adjusted operating income was primarily driven by increases in the Health Care Benefits and Pharmacy Services segments, largely offset by a decline in the Retail/LTC segment. The Health Care Benefits segment total revenues increased 9.9% for the quarter. The Pharmacy Services segment total revenues increased 10.7% for the quarter.

CVS in the third quarter of FY 22 has reported the adjusted earnings per share of $2.09, beating the analysts’ estimates for the adjusted earnings per share of $2. The company had reported the adjusted revenue growth of 10.7 percent to $81.16 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $76.76 billion.

CVS increased its FY EPS forecast to a range of $8.55-$8.65 from the prior $8.40-8.60, while also topping the consensus of $8.55. The cash flow from operations is now seen at $14 billion (the midpoint), up from the prior $13 billion forecast and again higher than the $13.1 billion consensus. CVS forecast adjusted 2023 earnings of $8.70 to $8.90 per share, below Wall Street expectations of $9.06, according to Refinitiv data.

CVS said it will repurchase shares to meet the 2024 earnings target it set last year, and that it is still open to acquisitions in healthcare services. Lynch described the company as looking for “the right capabilities at the right time.” The company earlier this year agreed to buy Signify Health for more than $8 billion. At the current valuation, an M&A deal is likely less accretive than share repurchase, as per the company.

CVS also announced it reached a $5 billion opioid settlement that will be paid over the next ten years beginning in 2023. The company has agreed to pay about $5 billion over 10 years to resolve thousands of lawsuits accusing its pharmacy chain of mishandling opioid painkillers. CVS took a pre-tax charge of $5.2 billion in the third quarter related to the settlement, a move that ends years of uncertainty for the company’s finances.