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

CVS Health (CVS) closed the most recent trading day at $58.41, moving +1.62% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.84%. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 1.27%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had lost 11.95% in the past month. In that same time, the Retail-Wholesale sector gained 1.6%, while the S&P 500 gained 0.6%.

Investors will be hoping for strength from CVS as it approaches its next earnings release. The company is expected to report EPS of $1.38, down 25% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $66.31 billion, up 2.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.23 per share and revenue of $266.74 billion, which would represent changes of +2.12% and +3.88%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for CVS. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% lower. CVS is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, CVS is holding a Forward P/E ratio of 7.95. Its industry sports an average Forward P/E of 11.13, so we one might conclude that CVS is trading at a discount comparatively.

Investors should also note that CVS has a PEG ratio of 1.42 right now. 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 1.43 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 215, which puts it in the bottom 16% 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.


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