Cardinal Health, Inc. (CAH), headquartered in Dublin, Ohio, operates as a healthcare services and products company. Valued at $54.6 billion by market cap, the company's services include pharmaceutical distribution, health-care product manufacturing, distribution and consulting services, drug delivery systems development, pharmaceutical packaging, automated dispensing systems manufacturing, and retail pharmacy franchising.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CAH perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical distribution industry. As one of the top three U.S. pharma wholesalers, CAH holds a commanding market position. Its diversified pharmaceutical and medical distribution portfolio, broadens its customer base, adds resilience to market swings, and creates multiple revenue streams with cross-selling opportunities.
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Despite its notable strength, CAH slipped 9.9% from its 52-week high of $258.30, achieved on Aug. 11. Over the past three months, CAH stock has gained 2.8%, underperforming the State Street SPDR S&P Health Care Services ETF’s (XHS) 12.9% gains during the same time frame.
www.barchart.comShares of CAH have rose 13.2% on a YTD basis, underperforming XHS’ YTD gains of 29.1%. However, in the longer term, the stock climbed 54.8% over the past 52 weeks, outperforming XHS’ 40.8% returns over the same time frame.
To confirm the bullish trend, CAH has been trading above its 200-day moving average over the past year, with slight fluctuations. However, despite a positive price momentum, the stock has been trading below its 50-day moving average recently.
www.barchart.comCAH beat on profit despite soft revenue, driven by strong demand in Pharma & Specialty Solutions, margin stability, automation-led efficiency gains, and double-digit growth in at-Home and Nuclear units along with a one-time $100 million IEEPA tariff refund.
Management highlighted strong execution, returned $1.4 billion via buybacks, raising authorization by $5 billion to $6.4 billion, and added a $4 billion revolver, guiding toward continued specialty-led growth while cautioning on input cost and regulatory headwinds.
On Aug. 11, CAH shares closed up by 1.3% after reporting its Q4 results. Its adjusted EPS of $2.91 beat Wall Street expectations of $2.42. The company’s revenue was $63.7 billion, missing Wall Street forecasts of $65.6 billion. CAH expects full-year adjusted EPS in the range of $12.40 to $12.60.
In the competitive arena of medical distribution, McKesson Corporation (MCK) has lagged behind CAH, with a 9.7% uptick on a YTD basis and 28% gains over the past 52 weeks.
Wall Street analysts are bullish on CAH’s prospects. The stock has a consensus “Strong Buy” rating from the 18 analysts covering it, and the mean price target of $270.88 suggests a potential upside of 16.4% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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