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CVS Health (CVS) Gains But Lags Market: What You Should Know

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CVS Health (CVS - Free Report) closed the most recent trading day at $103.60, moving +1.21% from the previous trading session. The stock lagged the S&P 500's daily gain of 2.57%. Elsewhere, the Dow gained 2%, while the tech-heavy Nasdaq added 0.66%.

Coming into today, shares of the drugstore chain and pharmacy benefits manager had lost 7.64% in the past month. In that same time, the Retail-Wholesale sector lost 11.68%, while the S&P 500 lost 7.68%.

Investors will be hoping for strength from CVS Health as it approaches its next earnings release. In that report, analysts expect CVS Health to post earnings of $2.16 per share. This would mark year-over-year growth of 5.88%. Meanwhile, our latest consensus estimate is calling for revenue of $75.17 billion, up 8.79% from the prior-year quarter.

CVS's full-year Zacks Consensus Estimates are calling for earnings of $8.26 per share and revenue of $307.17 billion. These results would represent year-over-year changes of -1.67% and +5.16%, respectively.

Any recent changes to analyst estimates for CVS Health should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.25% higher. CVS Health currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CVS Health has a Forward P/E ratio of 12.39 right now. This represents a premium compared to its industry's average Forward P/E of 10.9.

We can also see that CVS currently has a PEG ratio of 1.53. 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 industry currently had an average PEG ratio of 1.82 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 195, putting it in the bottom 24% 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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