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

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CVS Health (CVS - Free Report) closed the most recent trading day at $53.90, moving -0.59% from the previous trading session. This change lagged the S&P 500's 0.05% gain on the day. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq added 0.3%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 4.32% over the past month, lagging the Retail-Wholesale sector's gain of 4.01% and the S&P 500's gain of 3.08% in that time.

CVS will be looking to display strength as it nears its next earnings release, which is expected to be May 1, 2019. The company is expected to report EPS of $1.52, up 2.7% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $60.49 billion, up 32.39% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.83 per share and revenue of $251.62 billion. These totals would mark changes of -3.53% and +29.64%, respectively, from last year.

Any recent changes to analyst estimates for CVS should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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.

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 remained stagnant. CVS is currently a Zacks Rank #4 (Sell).

Looking at its valuation, CVS is holding a Forward P/E ratio of 7.94. This valuation marks a discount compared to its industry's average Forward P/E of 12.47.

We can also see that CVS currently has a PEG ratio of 1.06. 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. Retail - Pharmacies and Drug Stores stocks are, on average, holding a PEG ratio of 1.06 based on yesterday's closing prices.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 245, putting it in the bottom 4% 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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