CAH: Earnings Momentum and Industry Uncertainty Will Shape Outlook This Year

Cardinal Health's analyst price target has increased modestly from $212.43 to $214.71. Analysts cite stronger-than-expected quarterly results and raised guidance, driven by continued execution across core segments and strategic acquisitions.

Analyst Commentary

In the wake of Cardinal Health's latest earnings report and strategic developments, analysts have updated their outlooks, with several adjustments to price targets and long-term estimates. These perspectives highlight both optimistic expectations and ongoing areas of investor caution.

• Bullish analysts raised price targets significantly following Cardinal Health's strong quarterly results, indicating increased confidence in sustained earnings growth.
• Upward revisions to earnings per share estimates for fiscal 2026 and 2027 reflect expectations of better-than-anticipated profitability, especially as benefits from recent acquisitions are incorporated.
• Growth across all segments, particularly in the core pharmaceutical business, is supporting management's long-term 12% to 14% EPS targets. This reinforces positive sentiment around execution and margin recovery.
• The company's robust performance, including a substantial year-over-year increase in adjusted operating income, suggests potential further upside and a favorable demand environment.

• Some analysts highlight that forward guidance for fiscal 2026, despite being raised, remains conservative relative to the recent strong performance. This suggests management may be maintaining a cautious stance on future growth.
• There is a focus on whether the company can continue to achieve its ambitious long-term growth targets given industry competition and the need for ongoing execution.
• Certain segments, while recovering, may still face margin pressures or uncertainties that could impact overall profitability if not carefully managed.
• The recent positive momentum is at least partially attributable to modest accretion from acquisitions. Sustained organic growth will be needed to maintain elevated valuation levels.

What's in the News

• Mizuho analyst Steven Valiquette raised Cardinal Health's price target to $210, citing increased momentum following strong fiscal Q1 results and the Solaris deal. FY26 and FY27 EPS estimates were also revised upward (Periodicals).
• Cardinal Health was among notable companies reporting earnings. Consensus EPS for the upcoming quarter is estimated at $2.17 (Periodicals).
• The Trump administration is preparing a new probe into U.S. pharmaceutical prices. This could potentially impact major drug distributors such as Cardinal Health (Periodicals).

Valuation Changes

• Consensus Analyst Price Target has risen slightly to $214.71 from $212.43, reflecting a modest increase in expectations.
• Discount Rate remains essentially unchanged, adjusting marginally from 6.96% to 6.96%.
• Revenue Growth forecast has increased from 9.34% to 9.53%, indicating improved projections for top-line expansion.
• Net Profit Margin estimate has declined slightly from 0.72% to approximately 0.72%, signaling a minor decrease in expected profitability ratios.
• Future P/E multiple has grown from 26.38x to 26.90x. This suggests higher anticipated valuation relative to future earnings.