CVS Health Stock Dips Amid Broader Market Gain

CVS Health (CVS) stock dipped 2.12% to $61.96, lagging the S&P 500's 0.01% loss. The company is expected to report Q2 EPS of $1.47, down 19.67% YoY, and revenue of $93.72 billion, up 2.73% YoY. The Zacks Rank is #2 (Buy) and the Forward P/E ratio is 10.35, a discount compared to the industry's Forward P/E of 15.4. The PEG ratio is 0.91.

CVS Health (CVS) stock closed at $61.96 on July 2, 2025, marking a 2.12% decline from the previous trading session. This drop lagged the S&P 500's 0.01% loss and the broader market's performance. The company is expected to report its second-quarter (Q2) earnings on July 31, 2025. Analysts anticipate an earnings per share (EPS) of $1.47, a 19.67% year-over-year (YoY) decrease from the same quarter last year. Revenue is projected to reach $93.72 billion, up 2.73% YoY [1].

CVS Health's stock has been underperforming the broader market in recent weeks. Over the past month, CVS shares have fallen by 5.3%, compared to the Medical sector's loss of 1.59% and the S&P 500's gain of 5.37%. Despite this, the company's Zacks Rank remains at #2 (Buy), indicating a positive outlook from analysts [3].

Valuation metrics suggest that CVS Health is currently undervalued compared to its industry peers. The company's forward 12-month price-to-earnings (P/E) ratio stands at 10.35, which is a discount compared to the industry's average of 15.4. The PEG ratio, which also considers expected earnings growth, is 0.91, further indicating that CVS Health may be undervalued [3].

Looking at the broader context, CVS Health has been navigating significant regulatory changes and operational challenges. The Senate's removal of proposed Medicare Pharmacy Benefit Manager (PBM) limits and cuts to Medicare Advantage has reduced regulatory pressure, providing a boost to the company's stock performance [2]. Additionally, the company's strategic shift towards healthcare services and away from traditional pharmacy operations has been a key driver of growth [2].

CVS Health's Q2 earnings report will provide further insights into the company's ability to maintain its momentum and navigate these challenges. With strong operational performance, easing regulatory headwinds, and an attractive valuation, CVS Health stands out as a solid investment opportunity ahead of its earnings release.

References:
[1] https://finance.yahoo.com/news/cvs-health-cvs-dips-more-214504607.html
[2] https://www.ainvest.com/news/cvs-health-q2-earnings-turning-point-company-future-2507/
[3] https://finance.yahoo.com/news/cvs-health-cvs-dips-more-214504607.html