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

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In the latest trading session, CVS Health (CVS - Free Report) closed at $95.53, marking a -0.35% move from the previous day. This move lagged the S&P 500's daily gain of 1.21%. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 0.14%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had gained 2.7% over the past month, outpacing the Retail-Wholesale sector's gain of 2.38% and lagging the S&P 500's gain of 3.2% in that time.

Investors will be hoping for strength from CVS Health as it approaches its next earnings release, which is expected to be August 3, 2022. On that day, CVS Health is projected to report earnings of $2.16 per share, which would represent a year-over-year decline of 10.74%. Our most recent consensus estimate is calling for quarterly revenue of $76.57 billion, up 5.45% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.34 per share and revenue of $308.62 billion, which would represent changes of -0.71% and +5.65%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for CVS Health. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% lower. CVS Health is currently a Zacks Rank #3 (Hold).

Investors should also note CVS Health's current valuation metrics, including its Forward P/E ratio of 11.5. For comparison, its industry has an average Forward P/E of 7.81, which means CVS Health is trading at a premium to the group.

Investors should also note that CVS has a PEG ratio of 1.51 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. CVS's industry had an average PEG ratio of 1.54 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 181, which puts it in the bottom 29% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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