CVS Health (CVS) closed at $64.52 in the latest trading session, marking a +0.95% move from the prior day. This move outpaced the S&P 500's daily gain of 0.17%. Meanwhile, the Dow gained 0.6%, and the Nasdaq, a tech-heavy index, lost 0.81%.
Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had lost 0.61% over the past month. This has lagged the Retail-Wholesale sector's gain of 11.13% and the S&P 500's gain of 5.15% in that time.
Investors will be hoping for strength from CVS as it approaches its next earnings release, which is expected to be August 5, 2020. The company is expected to report EPS of $1.89, unchanged from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $64.34 billion, up 1.44% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.10 per share and revenue of $265.18 billion, which would represent changes of +0.28% and +3.27%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for CVS. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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. The Zacks Consensus EPS estimate has moved 0.16% higher within the past month. CVS is currently a Zacks Rank #3 (Hold).
Looking at its valuation, CVS is holding a Forward P/E ratio of 9.01. Its industry sports an average Forward P/E of 11.98, so we one might conclude that CVS is trading at a discount comparatively.
Investors should also note that CVS has a PEG ratio of 1.42 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 industry currently had an average PEG ratio of 2.08 as of yesterday's close.
The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 25, putting it in the top 10% 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.
To follow CVS in the coming trading sessions, be sure to utilize Zacks.com.
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