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CVS Health (CVS) Gains But Lags Market: What You Should Know

Zacks Equity Research

CVS Health (CVS) closed at $67.88 in the latest trading session, marking a +1.42% move from the prior day. The stock lagged the S&P 500's daily gain of 1.5%. Elsewhere, the Dow gained 1.44%, while the tech-heavy Nasdaq added 2.1%.

Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had lost 9.38% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.37% and the S&P 500's gain of 0.54% in that time.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. This is expected to be February 12, 2020. In that report, analysts expect CVS to post earnings of $1.68 per share. This would mark a year-over-year decline of 21.5%. Meanwhile, our latest consensus estimate is calling for revenue of $64.15 billion, up 17.87% from the prior-year quarter.

Any recent changes to analyst estimates for CVS should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. CVS is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CVS has a Forward P/E ratio of 9.36 right now. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 9.36.

Meanwhile, CVS's PEG ratio is currently 1.42. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CVS's industry had an average PEG ratio of 1.33 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 71, which puts it in the top 28% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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CVS Health Corporation (CVS) : Free Stock Analysis Report
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Zacks Investment Research