CVS Health (CVS) Exceeds Market Returns: Some Facts to Consider

The most recent trading session ended with CVS Health (CVS) standing at $78.06, reflecting a +0.63% shift from the previouse trading day's closing. The stock exceeded the S&P 500, which registered a gain of 0.57% for the day. At the same time, the Dow added 0.83%, and the tech-heavy Nasdaq gained 0.39%.

Prior to today's trading, shares of the drugstore chain and pharmacy benefits manager had gained 0.61% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.73% and the S&P 500's gain of 2.97% in that time.

The upcoming earnings release of CVS Health will be of great interest to investors. On that day, CVS Health is projected to report earnings of $1.69 per share, which would represent a year-over-year decline of 23.18%. Our most recent consensus estimate is calling for quarterly revenue of $89.28 billion, up 4.7% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $8.33 per share and a revenue of $370.63 billion, indicating changes of -4.69% and +3.59%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for CVS Health. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 0.2% lower. CVS Health currently has a Zacks Rank of #3 (Hold).

Digging into valuation, CVS Health currently has a Forward P/E ratio of 9.31. This denotes a premium relative to the industry's average Forward P/E of 6.39.

Also, we should mention that CVS has a PEG ratio of 1.03. 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 industry had an average PEG ratio of 1.16 as trading concluded yesterday.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 240, this industry ranks in the bottom 5% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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.

Remember to apply to follow these and more stock-moving metrics during the upcoming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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