Back to top

CVS Health (CVS) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

CVS Health (CVS - Free Report) closed at $65.53 in the latest trading session, marking a +0.52% move from the prior day. This move lagged the S&P 500's daily gain of 0.85%. Meanwhile, the Dow gained 1.15%, and the Nasdaq, a tech-heavy index, added 0.77%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had lost 18.51% in the past month. In that same time, the Retail-Wholesale sector lost 9.73%, while the S&P 500 lost 9.35%.

Investors will be hoping for strength from CVS as it approaches its next earnings release, which is expected to be February 14, 2019. The company is expected to report EPS of $1.71, down 10.94% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $50.40 billion, up 4.16% from the prior-year quarter.

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.

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 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. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. CVS is currently a Zacks Rank #3 (Hold).

Digging into valuation, CVS currently has a Forward P/E ratio of 9.29. Its industry sports an average Forward P/E of 10.43, so we one might conclude that CVS is trading at a discount comparatively.

We can also see that CVS currently has a PEG ratio of 0.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Pharmacies and Drug Stores was holding an average PEG ratio of 1.06 at yesterday's closing price.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


CVS Health Corporation (CVS) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in