CVS Health (CVS) Gains But Lags Market: What You Should Know
CVS Health (CVS) closed the most recent trading day at $73.72, moving +0.9% from the previous trading session. This change lagged the S&P 500's 2.15% gain on the day. Elsewhere, the Dow gained 2.17%, while the tech-heavy Nasdaq added 2.89%.
Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had lost 6.45% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 9.79% and lagged the S&P 500's loss of 5.16% in that time.
Investors will be hoping for strength from CVS as it approaches its next earnings release, which is expected to be November 6, 2018. The company is expected to report EPS of $1.71, up 14% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $47.22 billion, up 2.25% from the year-ago period.
CVS's full-year Zacks Consensus Estimates are calling for earnings of $7.05 per share and revenue of $188.95 billion. These results would represent year-over-year changes of +19.49% and +2.27%, respectively.
Investors should also note any recent changes to analyst estimates for CVS. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. CVS is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, CVS currently has a Forward P/E ratio of 10.37. Its industry sports an average Forward P/E of 11.48, so we one might conclude that CVS is trading at a discount comparatively.
Also, we should mention that CVS has a PEG ratio of 0.97. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CVS's industry had an average PEG ratio of 1.08 as of yesterday's close.
The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 23, putting it in the top 9% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow CVS in the coming trading sessions, be sure to utilize Zacks.com.
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