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

Zacks Equity Research
Ford (F) closed at $10.42 in the latest trading session, marking a -0.67% move from the prior day.

CVS Health (CVS) closed at $53.87 in the latest trading session, marking a -1.86% move from the prior day. This change lagged the S&P 500's daily gain of 0.95%. At the same time, the Dow added 0.94%, and the tech-heavy Nasdaq gained 0.8%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had gained 2.2% over the past month, lagging the Retail-Wholesale sector's gain of 2.74% and the S&P 500's gain of 2.47% in that time.

Investors will be hoping for strength from CVS as it approaches its next earnings release. In that report, analysts expect CVS to post earnings of $1.69 per share. This would mark no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $62.63 billion, up 34.09% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.85 per share and revenue of $252.56 billion. These totals would mark changes of -3.25% and +30.12%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for CVS. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.22% higher. CVS currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, CVS is holding a Forward P/E ratio of 8.01. For comparison, its industry has an average Forward P/E of 8.83, which means CVS is trading at a discount to the group.

It is also worth noting that CVS currently has a PEG ratio of 1.11. 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 1.1 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 216, putting it in the bottom 16% 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.

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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