CVS Health (CVS) closed the most recent trading day at $67.91, moving +0.5% from the previous trading session. This change lagged the S&P 500's 1.08% gain on the day. Meanwhile, the Dow gained 0.92%, and the Nasdaq, a tech-heavy index, added 1.41%.
Shares of the drugstore chain and pharmacy benefits manager witnessed a gain of 3.05% over the previous month, beating the performance of the Medical sector with its gain of 0.21% and the S&P 500's loss of 8.26%.
The investment community will be paying close attention to the earnings performance of CVS Health in its upcoming release. The company's earnings per share (EPS) are projected to be $1.62, reflecting a 23.66% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $92.82 billion, reflecting a 4.95% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $5.88 per share and a revenue of $387.86 billion, representing changes of +8.49% and +4.04%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for CVS Health. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, there's been a 0.58% fall in the Zacks Consensus EPS estimate. At present, CVS Health boasts a Zacks Rank of #3 (Hold).
Looking at valuation, CVS Health is presently trading at a Forward P/E ratio of 11.48. This valuation marks a discount compared to its industry's average Forward P/E of 16.13.
We can additionally observe that CVS currently boasts a PEG ratio of 1.02. 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. The Medical Services industry had an average PEG ratio of 1.42 as trading concluded yesterday.
The Medical Services industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 71, positioning it in the top 29% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
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