Results: Cardinal Health, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Cardinal Health, Inc. (NYSE:CAH) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat forecasts, with revenue of US$52b, some 2.9% above estimates, and statutory earnings per share (EPS) coming in at US$1.70, 53% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Cardinal Health

After the latest results, the consensus from Cardinal Health's 15 analysts is for revenues of US$218.8b in 2025, which would reflect a measurable 2.5% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to surge 25% to US$6.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$216.5b and earnings per share (EPS) of US$6.07 in 2025. So the consensus seems to have become somewhat more optimistic on Cardinal Health's earnings potential following these results.

The consensus price target rose 5.9% to US$123, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Cardinal Health at US$145 per share, while the most bearish prices it at US$101. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cardinal Health shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.3% by the end of 2025. This indicates a significant reduction from annual growth of 9.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cardinal Health is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Cardinal Health following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cardinal Health's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Cardinal Health going out to 2027, and you can see them free on our platform here.

Even so, be aware that Cardinal Health is showing 2 warning signs in our investment analysis , you should know about...

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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.