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

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In the latest trading session, CVS Health (CVS - Free Report) closed at $70.46, marking a -1.14% move from the previous day. This change lagged the S&P 500's daily gain of 0.74%. Meanwhile, the Dow gained 0.25%, and the Nasdaq, a tech-heavy index, added 11.47%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 1.37% over the past month, lagging the Retail-Wholesale sector's gain of 3.93% and the S&P 500's gain of 3.34% in that time.

Wall Street will be looking for positivity from CVS Health as it approaches its next earnings report date. This is expected to be August 2, 2023. On that day, CVS Health is projected to report earnings of $2.12 per share, which would represent a year-over-year decline of 11.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $86.47 billion, up 7.23% from the year-ago period.

CVS's full-year Zacks Consensus Estimates are calling for earnings of $8.61 per share and revenue of $348.4 billion. These results would represent year-over-year changes of -0.92% and +8.04%, respectively.

Investors should also note any recent changes to analyst estimates for CVS Health. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.15% lower within the past month. CVS Health currently has a Zacks Rank of #4 (Sell).

Investors should also note CVS Health's current valuation metrics, including its Forward P/E ratio of 8.28. This valuation marks a premium compared to its industry's average Forward P/E of 7.64.

Also, we should mention that CVS has a PEG ratio of 1.3. 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 industry currently had an average PEG ratio of 1.31 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 205, putting it in the bottom 19% 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.

To follow CVS in the coming trading sessions, be sure to utilize Zacks.com.


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