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

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Zacks Equity Research
·3 min read
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In the latest trading session, CVS Health (CVS) closed at $73.49, marking a +0.7% move from the previous day. This change outpaced the S&P 500's 0.11% loss on the day. Meanwhile, the Dow lost 0.03%, and the Nasdaq, a tech-heavy index, added 0.14%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had lost 3.58% in the past month. In that same time, the Retail-Wholesale sector gained 3.54%, while the S&P 500 gained 2.46%.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. This is expected to be February 16, 2021. On that day, CVS is projected to report earnings of $1.24 per share, which would represent a year-over-year decline of 28.32%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $68.67 billion, up 2.66% from the year-ago period.

Any recent changes to analyst estimates for CVS should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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% lower within the past month. CVS currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CVS has a Forward P/E ratio of 9.58 right now. This represents a discount compared to its industry's average Forward P/E of 11.31.

Also, we should mention that CVS has a PEG ratio of 1.51. 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. Retail - Pharmacies and Drug Stores stocks are, on average, holding a PEG ratio of 1.67 based on yesterday's closing prices.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 27, putting it in the top 11% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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