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

CVS Health (CVS) closed the most recent trading day at $84.51, moving +0.86% from the previous trading session. This change outpaced the S&P 500's 0.23% gain on the day.

Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had lost 0.68% over the past month. This has lagged the Retail-Wholesale sector's loss of 0.25% and the S&P 500's gain of 0.65% in that time.

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 $1.80, up 8.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $70.23 billion, up 4.74% from the year-ago period.

CVS's full-year Zacks Consensus Estimates are calling for earnings of $7.82 per share and revenue of $283.06 billion. These results would represent year-over-year changes of +4.27% and +5.34%, respectively.

Investors might also notice recent changes to analyst estimates for CVS. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.86% higher within the past month. CVS currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CVS has a Forward P/E ratio of 10.71 right now. For comparison, its industry has an average Forward P/E of 10.71, which means CVS is trading at a no noticeable deviation to the group.

Also, we should mention that CVS has a PEG ratio of 1.68. 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 1.55 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 121, which puts it in the top 48% 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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