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CVS Health (CVS) Outpaces Stock Market Gains: What You Should Know

·3 min read

CVS Health (CVS) closed at $102.26 in the latest trading session, marking a +1.57% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.66%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 0.05%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 3.24% over the past month, lagging the Retail-Wholesale sector's loss of 2.55% and outpacing the S&P 500's loss of 3.79% in that time.

CVS Health will be looking to display strength as it nears its next earnings release. In that report, analysts expect CVS Health to post earnings of $1.99 per share. This would mark year-over-year growth of 1.02%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $76.61 billion, up 3.82% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.54 per share and revenue of $311.79 billion, which would represent changes of +1.67% and +6.74%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for CVS Health. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. CVS Health currently has a Zacks Rank of #3 (Hold).

In terms of valuation, CVS Health is currently trading at a Forward P/E ratio of 11.79. This valuation marks a premium compared to its industry's average Forward P/E of 7.79.

Meanwhile, CVS's PEG ratio is currently 1.47. 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 industry currently had an average PEG ratio of 1.52 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 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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

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