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

Zacks Equity Research
·3-min read

CVS Health (CVS) closed the most recent trading day at $64.15, moving +1.57% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.31%. Elsewhere, the Dow gained 1.9%, while the tech-heavy Nasdaq added 1.01%.

CVS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.78, down 5.82% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $63.41 billion, down 0.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.05 per share and revenue of $263.79 billion, which would represent changes of -0.42% and +2.73%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for CVS. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 0.13% higher. CVS is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CVS is currently trading at a Forward P/E ratio of 8.96. This represents a no noticeable deviation compared to its industry's average Forward P/E of 8.96.

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. CVS's industry had an average PEG ratio of 1.66 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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