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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 $73.99, moving +1.97% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.49%. Elsewhere, the Dow gained 0.69%, while the tech-heavy Nasdaq added 2.56%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 1.32% over the past month, outpacing the Retail-Wholesale sector's loss of 2.15% and lagging the S&P 500's gain of 1.44% in that time.

Investors will be hoping for strength from CVS as it approaches its next earnings release. On that day, CVS is projected to report earnings of $1.24 per share, which would represent a year-over-year decline of 28.32%. Meanwhile, our latest consensus estimate is calling for revenue of $68.56 billion, up 2.5% from the prior-year quarter.

Any recent changes to analyst estimates for CVS should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. CVS is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, CVS is holding a Forward P/E ratio of 9.66. This represents a discount compared to its industry's average Forward P/E of 11.61.

We can also see that CVS currently has a PEG ratio of 1.64. 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 1.72 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 217, which puts it in the bottom 15% 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.

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


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