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

Zacks Equity Research

In the latest trading session, CVS Health (CVS) closed at $63.07, marking a +1.59% move from the previous day. This move outpaced the S&P 500's daily gain of 0.51%. Elsewhere, the Dow gained 0.36%, while the tech-heavy Nasdaq added 0.75%.

Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had gained 3.21% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.15% and lagged the S&P 500's gain of 3.44% in that time.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. On that day, CVS is projected to report earnings of $1.71 per share, which would represent a year-over-year decline of 1.16%. Our most recent consensus estimate is calling for quarterly revenue of $63.04 billion, up 33.36% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.96 per share and revenue of $252.42 billion. These totals would mark changes of -1.69% and +30.05%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CVS. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. CVS currently has a Zacks Rank of #2 (Buy).

Digging into valuation, CVS currently has a Forward P/E ratio of 8.92. This valuation marks a discount compared to its industry's average Forward P/E of 9.08.

We can also see that CVS currently has a PEG ratio of 1.36. 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. The Retail - Pharmacies and Drug Stores industry currently had an average PEG ratio of 1.36 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 108, which puts it in the top 43% 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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