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CVS Health (CVS) Dips More Than Broader Markets: What You Should Know

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CVS Health (CVS - Free Report) closed the most recent trading day at $74.92, moving -1.8% from the previous trading session. This change lagged the S&P 500's 0.41% loss on the day. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq lost 4.08%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had gained 0.97% over the past month, lagging the Retail-Wholesale sector's gain of 6.55% and the S&P 500's gain of 6.51% in that time.

Wall Street will be looking for positivity from CVS Health as it approaches its next earnings report date. This is expected to be May 3, 2023. In that report, analysts expect CVS Health to post earnings of $2.09 per share. This would mark a year-over-year decline of 5.86%. Meanwhile, our latest consensus estimate is calling for revenue of $81.69 billion, up 6.33% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.82 per share and revenue of $334.61 billion. These totals would mark changes of +1.5% and +3.77%, respectively, from last year.

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

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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.19% lower. CVS Health currently has a Zacks Rank of #3 (Hold).

In terms of valuation, CVS Health is currently trading at a Forward P/E ratio of 8.65. This represents a premium compared to its industry's average Forward P/E of 8.08.

Meanwhile, CVS's PEG ratio is currently 1.18. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CVS's industry had an average PEG ratio of 1.93 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 50, putting it in the top 20% 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.

To follow CVS in the coming trading sessions, be sure to utilize Zacks.com.


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