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

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CVS Health (CVS - Free Report) closed the most recent trading day at $68.01, moving +1.18% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.08%. At the same time, the Dow added 0.38%, and the tech-heavy Nasdaq lost 0.29%.

Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had lost 1.77% over the past month. This has lagged the Retail-Wholesale sector's gain of 1.96% and the S&P 500's gain of 3.8% in that time.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. On that day, CVS is projected to report earnings of $1.25 per share, which would represent a year-over-year decline of 27.75%. Our most recent consensus estimate is calling for quarterly revenue of $68.54 billion, up 2.47% from the year-ago period.

CVS's full-year Zacks Consensus Estimates are calling for earnings of $7.42 per share and revenue of $267.85 billion. These results would represent year-over-year changes of +4.8% and +4.31%, respectively.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. CVS is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, CVS is holding a Forward P/E ratio of 9.06. Its industry sports an average Forward P/E of 10.87, so we one might conclude that CVS is trading at a discount comparatively.

Also, we should mention that CVS has a PEG ratio of 1.54. 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. Retail - Pharmacies and Drug Stores stocks are, on average, holding a PEG ratio of 1.58 based on yesterday's closing prices.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 37, which puts it in the top 15% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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