Why CVS Health (CVS) is a Top Momentum Stock for the Long-Term

CVS Health (CVS) is highlighted as a momentum stock for investors' short lists, despite its Zacks Rank #3 (Hold), due to its strong VGM Score of A and Momentum Style Score of B. The company's shares have gained 6.2% over the past four weeks, supported by 12 analysts revising fiscal 2025 earnings estimates upwards in the last 60 days, increasing the consensus to $6.34 per share. This positive trend is complemented by CVS's historical average earnings surprise of +22.6%.

Analysis

CVS Health (CVS) exhibits a notable divergence between its neutral Zacks #3 (Hold) rating and several strong underlying quantitative indicators. The stock demonstrates clear positive momentum, evidenced by a 6.2% price increase over the past four weeks and a corresponding Momentum Style Score of 'B'. This trend is fundamentally supported by a positive shift in analyst sentiment for fiscal 2025, where 12 analysts have revised earnings estimates upward in the last 60 days, pushing the consensus estimate up by $0.22 to $6.34 per share. This upward revision is complemented by the company's strong track record of outperformance, which includes an average historical earnings surprise of +22.6%. The combination of these factors results in a top-tier VGM (Value, Growth, Momentum) Score of 'A', suggesting the stock's overall quantitative profile is significantly more robust than its neutral rank implies.

Key Decisions for Investors

• Momentum-focused investors should consider the strong underlying signals for CVS, particularly the recent 6.2% price gain and the broad-based upward revisions to fiscal 2025 earnings estimates.
• Investors should monitor for a potential upgrade from the current Zacks #3 (Hold) rank, as a change in rating could act as a significant catalyst given the already strong 'A' grade VGM score.
• Given the company's historical average earnings surprise of +22.6%, it may be prudent to anticipate that actual fiscal 2025 results could materially exceed the current consensus estimate of $6.34 per share.