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

·3 min read

In the latest trading session, CVS Health (CVS) closed at $101.05, marking a +0.6% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.34%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.02%.

Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had lost 5.62% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 6.76% and the S&P 500's loss of 7.95% in that time.

CVS Health will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.99, up 1.02% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $76.53 billion, up 3.7% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.54 per share and revenue of $311.69 billion, which would represent changes of +1.67% and +6.7%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for CVS Health. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, 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 0.03% lower within the past month. CVS Health is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CVS Health is currently trading at a Forward P/E ratio of 11.77. For comparison, its industry has an average Forward P/E of 7.5, which means CVS Health is trading at a premium to the group.

Meanwhile, CVS's PEG ratio is currently 1.53. 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 1.52 at yesterday's closing price.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 94, putting it in the top 38% 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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