CAH: Core Pharmaceutical Trends And Automation Will Shape Upcoming Earnings Performance

Cardinal Health's analyst price target has increased from $180 to $216 per share. This reflects stronger confidence in the company's core pharmaceutical business and its ability to deliver on long-term earnings targets, according to recent analyst commentary following robust quarterly results.

Analyst Commentary

Recent analyst reports reflect a blend of optimism and caution regarding Cardinal Health's valuation and future growth trajectory. The following highlights showcase both the case for continued upside as well as areas flagged for closer scrutiny.

Bullish Takeaways

• Bullish analysts have increased their price targets for Cardinal Health, citing strong quarterly performance. This has reinforced confidence in the company's ability to meet long-term adjusted EPS growth targets of 12% to 14%.
• There is notable belief in the resilience of Cardinal Health's core pharmaceutical business, with positive momentum viewed as sustainable in upcoming quarters.
• The company’s decision to raise its fiscal year 2026 operational guidance shortly after a robust Investor Day is interpreted as a strong indicator of enterprise strength and management’s visibility into future growth.
• Double-digit growth in core business segments is seen as a key driver that may not be fully reflected in current share price multiples. This suggests there may be potential undervaluation if execution continues as expected.

Bearish Takeaways

• Some bearish analysts believe recent share price weakness is justified, partly due to Pharma segment growth registering below consensus after high expectations following Investor Day.
• There are concerns that certain quarterly results may not have met elevated market expectations, which could limit near-term upside or contribute to volatility.
• While the long-term outlook remains constructive, skepticism remains as to whether current valuation multiples adequately reflect the anticipated segment stability and ongoing double-digit AOI growth.

What's in the News

• Cardinal Health is slated to report earnings, with consensus EPS of $2.17. This is part of a lineup of notable companies releasing results before markets open. (Periodicals)
• The Trump administration is preparing a new investigation into U.S. trading partners over drug pricing. Cardinal Health is among U.S.-based pharmaceutical distributors potentially impacted. (Periodicals)
• Cardinal Health has launched the Kendall SCD SmartFlow Compression System internationally. The system introduces advanced patient monitoring and therapy tracking aimed at preventing venous thromboembolism. (Key Developments)
• The company announced plans for a new, highly automated forward distribution center in Indianapolis, Indiana. The project is expected to create over 100 new jobs and expand Cardinal Health’s national pharmaceutical logistics network. (Key Developments)
• Cardinal Health opened a new Consumer Health Logistics Center in Groveport, Ohio, as part of a multi-year strategy to boost supply chain efficiency, expand automation, and create jobs across its U.S. operations. (Key Developments)

Valuation Changes

• The Fair Value Estimate has increased moderately, rising from $180.46 to $189.36 per share.
• The Discount Rate remains unchanged at 6.78%.
• Revenue Growth projections have risen slightly, moving from 8.97% to 9.20%.
• The Net Profit Margin has declined marginally, decreasing from 0.78% to 0.77%.
• The Future P/E Ratio has increased from 22.49x to 23.60x, reflecting a modest uplift in expected valuation multiples.