CVS – CVS Health (CVS) Gains But Lags Market: What You Should Know
In the latest trading session, CVS Health (CVS) closed at $81.80, marking a +1.4% move from the previous day. This change lagged the S&P 500’s 1.52% gain on the day.
Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 3.99% over the past month, lagging the Retail-Wholesale sector’s loss of 1.17% and the S&P 500’s gain of 2.41% in that time.
CVS will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2021. In that report, analysts expect CVS to post earnings of $2.07 per share. This would mark a year-over-year decline of 21.59%. Our most recent consensus estimate is calling for quarterly revenue of $70.08 billion, up 7.25% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.66 per share and revenue of $281.08 billion. These totals would mark changes of +2.13% and +4.6%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for CVS. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
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 0.11% higher. CVS is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, CVS is holding a Forward P/E ratio of 10.53. For comparison, its industry has an average Forward P/E of 10.41, which means CVS is trading at a premium to the group.
Investors should also note that CVS has a PEG ratio of 1.57 right now. 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. CVS’s industry had an average PEG ratio of 1.49 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 244, which puts it in the bottom 4% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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