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

Zacks Equity Research
·3-min read

CVS Health (CVS) closed at $106.79 in the latest trading session, marking a +1.84% move from the prior day. This change outpaced the S&P 500's 0.54% loss on the day. Elsewhere, the Dow lost 0.02%, while the tech-heavy Nasdaq lost 0.12%.

Heading into today, shares of the drugstore chain and pharmacy benefits manager had gained 1.12% over the past month, outpacing the Retail-Wholesale sector's loss of 12.57% and the S&P 500's loss of 7.87% in that time.

CVS Health will be looking to display strength as it nears its next earnings release, which is expected to be February 9, 2022. The company is expected to report EPS of $1.85, up 42.31% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $75.87 billion, up 9.08% from the year-ago period.

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

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

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 0.22% higher. CVS Health is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, CVS Health currently has a Forward P/E ratio of 12.72. This valuation marks a premium compared to its industry's average Forward P/E of 9.83.

Meanwhile, CVS's PEG ratio is currently 1.64. 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 1.92 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 197, which puts it in the bottom 23% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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