Update shared on 13 Dec 2025
Fair value Increased 0.88%Analysts have nudged their blended price target on Cardinal Health slightly higher, with fair value rising about $2 to roughly $217, citing stronger than expected EPS momentum, resilient core Pharma performance, and increased confidence in the company achieving its 12% to 14% long term EPS growth algorithm.
Analyst Commentary
Street commentary on Cardinal Health remains broadly constructive, with several bullish analysts lifting price targets into the low $200s and emphasizing both near term earnings momentum and the durability of the company growth algorithm.
Recent estimate revisions have also trended higher, with forward EPS expectations for FY26 and FY27 moving up as analysts incorporate stronger than anticipated Q1 performance and incremental contribution from the Solaris acquisition.
Bullish Takeaways
- Bullish analysts highlight robust execution in the Pharma segment, noting that strong core volumes and favorable utilization trends are supporting higher confidence in double digit EPS growth.
- Several models now assume increased EPS trajectories through FY27, with higher price targets reflecting perceived upside to management long term 12 to 14 percent adjusted EPS growth framework.
- Commentary points to a clean start to FY26, including solid segment level performance and recovering margins in medical distribution, which supports a higher valuation multiple on improved earnings quality.
- Guidance is viewed by some as conservative relative to recent upside delivery, suggesting potential for continued positive revisions and further re rating if execution remains consistent.
Bearish Takeaways
- More cautious analysts flag that much of the near term optimism is now reflected in elevated price targets, leaving less room for multiple expansion if earnings outperformance moderates.
- There is some concern that ongoing reliance on Pharma outperformance raises sensitivity to any slowdown in volume growth or pricing pressure, which could challenge the upper end of the EPS growth algorithm.
- Integration and synergy realization from recent deals, including Solaris, are seen as execution swing factors, with any delays or cost overruns potentially constraining margin upside.
- Peers benefiting from the same favorable demand backdrop may limit relative multiple expansion, as investors compare the Cardinal Health growth profile and risk factors against other large distributors.
What's in the News
- Mizuho raised its Cardinal Health price target to $210 from $170, citing stronger post Q1 momentum and higher FY26 and FY27 EPS estimates of $9.80 and $11.20, respectively (Mizuho, Periodical).
- Cardinal Health is scheduled to report earnings, with a Street consensus EPS estimate of $2.17. This places it among notable companies watched ahead of tomorrow's market open (Periodical).
- The Trump administration is preparing a new probe into global drug pricing that could affect large distributors, including Cardinal Health, as well as major drugmakers and managed care companies (Financial Times, Periodical).
- From July 1 to September 30, 2025, Cardinal Health repurchased about 2.0 million shares for $300 million, completing a 3.5 percent, $1.06 billion buyback program initiated in 2023 (Company filing, Key Development).
- Cardinal Health continues to expand and modernize its distribution network with new high-automation pharmaceutical and consumer health facilities in Indianapolis, Indiana, and Groveport, Ohio, adding more than 250 jobs and enhancing national logistics capacity (Company press releases, Key Developments).
Valuation Changes
- Fair Value has risen slightly, increasing from about $214.71 to $216.60 per share, reflecting modestly higher long term earnings expectations.
- Discount Rate is effectively unchanged, remaining at 6.956 percent, indicating a stable risk assessment.
- Revenue Growth assumptions are essentially flat at about 9.53 percent, implying no material change in the top line outlook.
- Net Profit Margin is unchanged at roughly 0.7170 percent, signaling stable expected profitability.
- Future P/E has risen modestly, increasing from about 26.90x to 27.13x, suggesting a slightly higher valuation multiple on forward earnings.
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