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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 at $65.88 in the latest trading session, marking a +1.2% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.56%. Meanwhile, the Dow gained 0.49%, and the Nasdaq, a tech-heavy index, added 1.01%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had gained 5.7% in the past month. In that same time, the Retail-Wholesale sector gained 0.67%, while the S&P 500 gained 1.38%.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. This is expected to be November 6, 2019. On that day, CVS is projected to report earnings of $1.77 per share, which would represent year-over-year growth of 2.31%. Our most recent consensus estimate is calling for quarterly revenue of $63.03 billion, up 33.34% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.98 per share and revenue of $252.63 billion. These totals would mark changes of -1.41% and +30.16%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for CVS. Recent revisions tend to reflect the latest near-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. The Zacks Consensus EPS estimate has moved 0.03% higher within the past month. CVS is currently a Zacks Rank #3 (Hold).

Digging into valuation, CVS currently has a Forward P/E ratio of 9.33. This valuation marks a discount compared to its industry's average Forward P/E of 9.36.

Also, we should mention that CVS has a PEG ratio of 1.42. 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 was holding an average PEG ratio of 1.42 at yesterday's closing price.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 103, putting it in the top 41% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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