With a market cap of $69.6 billion, Woonsocket, Rhode Island-based CVS Health Corporation (CVS) is a leading pharmacy innovation company offering pharmacy benefit management, mail order and retail pharmacy, disease management programs, and retail clinics. It operates through three segments: Health Care Benefits; Health Services; and Pharmacy & Consumer Wellness. 

Companies worth more than $10 billion are generally described as “large-cap” stocks and CVS Health fits this criterion perfectly.  The company provides health insurance products, pharmacy benefit management solutions, and consumer wellness offerings such as prescription and over-the-counter drugs, personal care, and beauty products. 

Shares of the drugstore chain and pharmacy benefits manager are trading 33.6% below its 52-week high of $83.25, recorded in January. The company has declined 4.3% over the past three months, lagging behind the broader SPDR S&P Health Care Services ETF’s (XHS) marginal return over the same time frame.

In the longer term, CVS stock is down nearly 30% on a YTD basis, underperforming XHS’ 8% gain. Moreover, shares of CVS have dipped 24.8% over the past 52 weeks, compared to XHS’ 11.6% return over the same time frame.

To confirm its bearish trend, CVS has been trading below its 50-day and 200-day moving averages since April despite some fluctuations. 

Shares of CVS Health climbed 11.3% on Nov. 6 due to a combination of positive earnings surprises and strategic developments. The company reported better-than-expected Q3 adjusted EPS of $1.09 and revenue of $95.4 billion. The revenue growth was driven by strong performance in the Health Care Benefits segment, which saw a 25.5% year-over-year increase, and the Pharmacy & Consumer Wellness segment, which grew 12.3% due to higher prescription volumes. Furthermore, the announcement of a restructuring plan aimed at cost reductions and organizational efficiency boosted investor confidence.

However, CVS’ underperformance becomes more evident when compared to its rival, The Cigna Group (CI), which surged 23.4% over the past 52 weeks and 6.1% on a YTD basis. 

Despite CVS lagging behind its industry peers, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from 24 analysts in coverage, and the mean price target of $67.30 suggests a 21.7% premium to its current levels.