On Tuesday, Citi analyst confirmed a Neutral rating and a $129.00 price target for Cardinal Health (NYSE:CAH) stock, which has shown impressive momentum with a 29.5% gain over the past six months.
According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value metrics. Grosslight's statement followed the company's announcement that its adjusted earnings per share (EPS) for fiscal year 2025 are expected to reach the higher end of the projected range of $7.75 to $7.90. This forecast is primarily attributed to the ongoing strength in the Pharmaceutical (TADAWUL:2070) segment.
The projection aligns with Citi's estimations as outlined in their recent 2025 Outlook. Cardinal Health, which boasts an impressive track record of 43 consecutive years of dividend payments and maintains a GREAT financial health score according to InvestingPro, shared this information ahead of their presentation at an investor conference scheduled for 12:00 PM ET today.
Analysts anticipate that the company will discuss several long-term growth drivers mentioned during a recent fireside chat, including favorable utilization trends, generic drug stability, and the robust performance of specialty pharmaceuticals.
Moreover, Cardinal Health is expected to provide a comprehensive update on their Medical (TASE:PMCN) Segment Optimization (MSO) strategy. This includes developments in their Navista tech solutions, enhancements to ION and GIA programs, and further integration of their Specialty Networks.
Citi is particularly interested in updates regarding the Global Medical Products Distribution (GMPD) business, citing increased risk in this segment. The firm notes there is uncertainty about whether Cardinal Health will meet its $300 million EBIT target for fiscal year 2026. The company's performance in this area is under close scrutiny, as it is considered a significant factor for future financial outcomes.
In other recent news, Cardinal Health has revised its full-year earnings forecast for fiscal year 2025, primarily driven by strength within the Pharmaceutical and Specialty Solutions segment. The company now expects its non-GAAP EPS to be at the higher end of the previously projected range of $7.75 to $7.90, above the consensus estimate of $7.84.
Cardinal Health's stock rating has been upgraded from Hold to Buy by TD Cowen, with a new price target set at $144. The upgrade is grounded in the expectation that Cardinal Health will outperform current earnings projections due to new customer acquisitions, strong utilization trends, and recent mergers and acquisitions in specialty services.
In addition, Evercore ISI upgraded its rating on Cardinal Health shares from In Line to Outperform, suggesting potential for higher long-term guidance. BofA Securities also upgraded Cardinal Health stock from Neutral to Buy, adjusting the price target upward to $145, expecting an upside to EPS estimates.
Cardinal Health announced plans to acquire Integrated Oncology Network for $1.1 billion and is also planning to acquire the majority equity interests in The GI Alliance Holdings, LLC, and Advanced Diabetes Supply Group. The company successfully raised $2.9 billion through a public offering of senior notes to partially finance these acquisitions.
Lastly, T2 Biosystems (NASDAQ:TTOO) decided to license its sepsis detection technology following a commercial agreement with Cardinal Health, aiming to improve patient outcomes, reduce mortality rates, and lower healthcare costs by enabling faster, targeted antimicrobial decisions. These are all recent developments that highlight the ongoing growth and strategic initiatives of Cardinal Health.
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