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CVS Health (CVS) Gains As Market Dips: What You Should Know

Zacks Equity Research

CVS Health (CVS) closed the most recent trading day at $56.26, moving +1.3% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.16%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq lost 0.44%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had gained 1.46% in the past month. In that same time, the Retail-Wholesale sector gained 4.42%, while the S&P 500 gained 4%.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. This is expected to be August 7, 2019. In that report, analysts expect CVS to post earnings of $1.70 per share. This would mark year-over-year growth of 0.59%. Meanwhile, our latest consensus estimate is calling for revenue of $62.61 billion, up 34.05% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.84 per share and revenue of $252.60 billion, which would represent changes of -3.39% and +30.14%, respectively, from the prior year.

It is also important to note the 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% lower. CVS is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, CVS currently has a Forward P/E ratio of 8.11. This valuation marks a discount compared to its industry's average Forward P/E of 9.2.

Investors should also note that CVS has a PEG ratio of 1.25 right now. 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. The Retail - Pharmacies and Drug Stores was holding an average PEG ratio of 1.25 at yesterday's closing price.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 200, which puts it in the bottom 22% 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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