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

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In the latest trading session, CVS Health (CVS - Free Report) closed at $59.43, marking a +1.11% move from the previous day. This move outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 0.33%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 0.15% over the past month, lagging the Retail-Wholesale sector's gain of 7.48% and the S&P 500's gain of 3.42% in that time.

Investors will be hoping for strength from CVS as it approaches its next earnings release, which is expected to be November 6, 2020. In that report, analysts expect CVS to post earnings of $1.31 per share. This would mark a year-over-year decline of 28.8%. Meanwhile, our latest consensus estimate is calling for revenue of $66.34 billion, up 2.37% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.23 per share and revenue of $266.74 billion, which would represent changes of +2.12% and +3.88%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for CVS. These recent revisions tend to reflect the evolving nature of short-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.04% higher. CVS is currently a Zacks Rank #2 (Buy).

Looking at its valuation, CVS is holding a Forward P/E ratio of 8.13. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 8.13.

Meanwhile, CVS's PEG ratio is currently 1.46. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Pharmacies and Drug Stores industry currently had an average PEG ratio of 1.48 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 208, which puts it in the bottom 18% 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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