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

Zacks Equity Research

CVS Health (CVS) closed at $73.53 in the latest trading session, marking a -0.65% move from the prior day. This change lagged the S&P 500's 0.11% gain on the day. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq added 0.2%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had lost 0.67% over the past month, lagging the Retail-Wholesale sector's gain of 2.91% and the S&P 500's gain of 3.25% in that time.

Wall Street will be looking for positivity from CVS as it approaches its next earnings report date. This is expected to be February 12, 2020. In that report, analysts expect CVS to post earnings of $1.68 per share. This would mark a year-over-year decline of 21.5%. Meanwhile, our latest consensus estimate is calling for revenue of $64.15 billion, up 17.88% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for CVS. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. CVS is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, CVS is holding a Forward P/E ratio of 10.35. For comparison, its industry has an average Forward P/E of 10.35, which means CVS is trading at a no noticeable deviation to the group.

Meanwhile, CVS's PEG ratio is currently 1.58. 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. The Retail - Pharmacies and Drug Stores was holding an average PEG ratio of 1.36 at yesterday's closing price.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 78, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

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


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