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CVS Health (CVS) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, CVS Health (CVS - Free Report) closed at $84.23, marking a -0.6% move from the previous day. This change lagged the S&P 500's daily loss of 0.04%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had lost 5.01% in the past month. In that same time, the Retail-Wholesale sector gained 1.48%, while the S&P 500 gained 1.35%.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. The company is expected to report EPS of $2.01, down 23.86% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $70.36 billion, up 7.68% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.64 per share and revenue of $281.64 billion. These totals would mark changes of +1.87% and +4.81%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CVS. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. CVS is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note CVS's current valuation metrics, including its Forward P/E ratio of 11.09. For comparison, its industry has an average Forward P/E of 11, which means CVS is trading at a premium to the group.

Also, we should mention that CVS has a PEG ratio of 1.65. 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. CVS's industry had an average PEG ratio of 1.63 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 90, putting it in the top 36% 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.

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


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