How Cardinal Health's New Automated Distribution Centers (CAH) Have Changed Its Investment Story

• Earlier this month, Cardinal Health announced the opening of a 340,000 square foot distribution center in Fort Worth, Texas dedicated solely to its at-Home Solutions business, along with plans to break ground on a new facility in Sacramento, California later this fiscal year.
• This expansion highlights Cardinal Health's commitment to supporting millions of patients managing chronic health conditions at home, while integrating advanced robotics and automation to boost operational efficiency nationwide.
• We'll explore how the enhanced at-Home Solutions distribution network reinforces Cardinal Health's investment thesis and potential for margin improvement.

Find companies with promising cash flow potential yet trading below their fair value.

Cardinal Health Investment Narrative Recap

Cardinal Health’s investment appeal centers on its scale in healthcare distribution and momentum in segments like at-Home Solutions, where automation and new facilities promise stronger efficiency and reach. The Fort Worth center opening signals ongoing efforts to optimize operations, but has only a modest effect on the key short-term catalyst, realizing meaningful margin gains, while the main risk remains government reimbursement changes that could pressure profitability, especially in home-based care.

Among Cardinal Health’s recent announcements, the Fort Worth, Texas, distribution center, dedicated to the at-Home Solutions business, stands out as most relevant. Serving over 6 million people annually, this expansion is closely tied to current catalysts, enhancing Cardinal’s position as a supplier while further embedding automation to drive long-term operational savings.

However, risks tied to competitive bidding and changes in reimbursement for at-home care could weigh much more heavily on future earnings than...

Read the full narrative on Cardinal Health (it's free!)

Cardinal Health's outlook anticipates $288.0 billion in revenue and $2.2 billion in earnings by 2028. This is based on a 9.0% annual revenue growth rate and a $0.6 billion increase in earnings from the current $1.6 billion.

Uncover how Cardinal Health's forecasts yield a $180.46 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members shared four fair value estimates for Cardinal Health ranging from US$135 to US$581, underlining strikingly varied valuations. While community perspectives differ, recent advances in distribution automation may be increasingly important as competition and payer pressures intensify.

Explore 4 other fair value estimates on Cardinal Health - why the stock might be worth 11% less than the current price!

Build Your Own Cardinal Health Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Cardinal Health research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Cardinal Health research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cardinal Health's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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