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CVS Health (CVS) Gains But Lags Market: What You Should Know

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CVS Health (CVS - Free Report) closed at $63.47 in the latest trading session, marking a +0.06% move from the prior day. This change lagged the S&P 500's 0.26% gain on the day. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, added 0.4%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had gained 3.32% over the past month, lagging the Retail-Wholesale sector's gain of 3.9% and the S&P 500's gain of 3.92% 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 $1.77 per share. This would mark year-over-year growth of 2.31%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $63.04 billion, up 33.37% from the year-ago period.

CVS's full-year Zacks Consensus Estimates are calling for earnings of $6.96 per share and revenue of $252.42 billion. These results would represent year-over-year changes of -1.69% and +30.05%, respectively.

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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% higher. CVS is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note CVS's current valuation metrics, including its Forward P/E ratio of 9.11. Its industry sports an average Forward P/E of 9.18, so we one might conclude that CVS is trading at a discount comparatively.

It is also worth noting that CVS currently has a PEG ratio of 1.38. 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 1.38 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 99, putting it in the top 39% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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