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1. Company Snapshot

1.a. Company Description

Cardinal Health, Inc.operates as an integrated healthcare services and products company in the United States, Canada, Europe, Asia, and internationally.It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home.


The company operates in two segments, Pharmaceutical and Medical.The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products.The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and offers medication therapy management and patient outcomes services to hospitals, other healthcare providers, and payers, as well as provides pharmacy management services to hospitals.


The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines.The segment also distributes a range of national brand products, including medical, surgical, and laboratory products; provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers; and assembles and sells sterile, and non-sterile procedure kits.The company was incorporated in 1979 and is headquartered in Dublin, Ohio.

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1.b. Last Insights on CAH

Cardinal Health's recent performance was driven by strong Q2 2026 earnings, which surpassed estimates by 10%, and a raised full-year earnings outlook. The company's segment profits were robust, and its non-GAAP EPS of $2.63 beat the consensus estimate. Additionally, institutional investors, such as Strategy Asset Managers LLC, have shown confidence in the company by investing in its stock. Wells Fargo upgraded its price target on Cardinal Health to $237.00, citing an overweight rating. The company's growth prospects and financials position it for outperformance.

1.c. Company Highlights

2. Cardinal Health's Strong Q2 FY2026 Earnings Beat Expectations

Cardinal Health reported a robust second quarter fiscal 2026, with total revenue surging 19% to $66 billion, driven by strong demand in the pharmaceutical and specialty solutions segment. Gross margin expanded 24% to $2.4 billion, fueled by favorable mix across businesses. Non-GAAP diluted EPS came in at $2.63, significantly beating estimates of $2.34, and representing a 36% increase from the prior year period. Operating earnings rose 38% to $877 million. The company's financial performance was highlighted by Jason Hollar, who stated that the team's "consistent execution gives us confidence in the long-term potential ahead."

Publication Date: Feb -09

📋 Highlights

Segment-wise Performance

The pharmaceutical and specialty solutions segment drove revenue growth, increasing 19% to $61 billion, while the GNPD segment reported revenue growth of 3% to $3.3 billion. The other growth businesses saw revenue growth of 34% to $1.7 billion. The company's strategy within pharmaceutical and specialty solutions remains focused on prioritizing the core, with investments in footprint and technology contributing to improved service levels.

Guidance and Outlook

Cardinal Health raised its fiscal year 2026 earnings per share guidance to a new range of $10.15 to $10.35, representing year-over-year EPS growth of 23% to 26%. The company's guidance is driven by its confidence in continued strong demand across its businesses. Analysts estimate next year's revenue growth at 9.0%, indicating a steady trajectory.

Valuation Metrics

With a P/E Ratio of 32.06 and an EV/EBITDA of 18.42, the market appears to have priced in significant growth expectations. The company's ROIC of 12.07% suggests a relatively efficient use of capital. However, the ROE of -58.93% raises concerns about the company's profitability. It is essential to consider these metrics when evaluating the stock's potential.

Operational Highlights

The company is seeing growing contributions across specialty distribution, MSO platforms, and biopharma solutions. The acquisition of Solaris Health is gaining momentum, and the company is investing organically in its businesses to drive growth. The biopharma services segment is expected to grow 30% this year, with half of that coming from Synexis.

3. NewsRoom

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Elo Mutual Pension Insurance Co Acquires 14,954 Shares of Cardinal Health, Inc. $CAH

Mar -03

Source: defenseworld.net

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Cardinal Health (NYSE:CAH) Reaches New 12-Month High Following Analyst Upgrade

Mar -03

Source: defenseworld.net

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Best Dividend Aristocrats For March 2026

Feb -27

Source: seekingalpha.com

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3 Big Winners from the 2025 Q4 Earnings Cycle: CAH, BOOT, PLTR

Feb -27

Source: zacks.com

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Cardinal Health, Inc. $CAH Shares Acquired by Cozad Asset Management Inc.

Feb -25

Source: defenseworld.net

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Cardinal Health report highlights cost savings and provider confidence in biosimilars

Feb -24

Source: prnewswire.com

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Cardinal Health, Inc. $CAH Shares Bought by Counterpoint Mutual Funds LLC

Feb -24

Source: defenseworld.net

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Raiffeisen Bank International AG Has $252,000 Stake in Cardinal Health, Inc. $CAH

Feb -23

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.52%)

6. Segments

Pharmaceutical

Expected Growth: 5.5%

Cardinal Health's Pharmaceutical segment growth of 5.5% is driven by increasing demand for generic drugs, expansion of specialty pharmaceutical services, and strategic acquisitions. Additionally, the company's focus on operational efficiency and cost savings initiatives have contributed to the growth. Furthermore, the rise in healthcare expenditure and an aging population have also fueled the segment's growth.

Medical

Expected Growth: 5.8%

Cardinal Health's Medical segment growth of 5.8% is driven by increasing demand for medical products and supplies, particularly in the areas of surgical and infection prevention. Additionally, the company's strategic acquisitions and partnerships have expanded its product offerings and geographic reach, contributing to growth. Furthermore, the ongoing shift towards outpatient care and the need for cost-effective solutions are also driving demand for Cardinal Health's medical products.

Corporate

Expected Growth: 6.2%

Cardinal Health, Inc.'s 6.2% corporate growth is driven by strategic acquisitions, expansion into emerging markets, and increased demand for medical products and services. Additionally, the company's focus on operational efficiency, cost savings initiatives, and investments in digital transformation have contributed to its growth momentum.

7. Detailed Products

Pharmaceutical Distribution

Cardinal Health's pharmaceutical distribution segment provides pharmaceuticals, vaccines, and consumer goods to retail pharmacies, hospitals, and clinics.

Medical Products

Cardinal Health's medical products segment offers a range of medical products, including surgical and procedural products, infection prevention products, and orthopedic and wound care products.

Cardinal Health at-Home Solutions

Cardinal Health's at-home solutions segment provides medical products and services to patients in their homes, including respiratory therapy, sleep therapy, and medical equipment.

Nuclear and Precision Health

Cardinal Health's nuclear and precision health segment provides radiopharmaceuticals and molecular imaging agents for diagnostic and therapeutic applications.

Patient Recovery

Cardinal Health's patient recovery segment offers a range of products and services to support patient recovery, including pain management, wound care, and orthopedic products.

8. Cardinal Health, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Cardinal Health, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified product portfolio and strong relationships with its customers.

Bargaining Power Of Customers

Cardinal Health, Inc. has a large and diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often critical to its customers' operations, making it difficult for customers to negotiate prices or switch to alternative suppliers.

Bargaining Power Of Suppliers

Cardinal Health, Inc. relies on a large network of suppliers to provide raw materials and components for its products. While the company has some bargaining power due to its size and scale, suppliers may still have some negotiating power, particularly if they are sole-source providers of critical components.

Threat Of New Entrants

The medical products and pharmaceutical distribution industries are highly regulated and require significant capital investments, making it difficult for new entrants to enter the market. Additionally, Cardinal Health, Inc.'s established relationships with customers and suppliers create barriers to entry for new competitors.

Intensity Of Rivalry

The medical products and pharmaceutical distribution industries are highly competitive, with several large players competing for market share. Cardinal Health, Inc. faces intense competition from rivals such as McKesson Corporation, AmerisourceBergen Corporation, and Owens & Minor, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 254.11%
Debt Cost 4.82%
Equity Weight -154.11%
Equity Cost 7.52%
WACC 0.65%
Leverage -164.89%

11. Quality Control: Cardinal Health, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
J&J

A-Score: 6.9/10

Value: 3.1

Growth: 4.0

Quality: 8.8

Yield: 6.0

Momentum: 9.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
AbbVie

A-Score: 6.7/10

Value: 3.1

Growth: 4.7

Quality: 7.2

Yield: 7.0

Momentum: 9.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Cardinal Health

A-Score: 6.6/10

Value: 6.8

Growth: 6.6

Quality: 4.5

Yield: 4.0

Momentum: 10.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
McKesson

A-Score: 6.1/10

Value: 5.4

Growth: 8.3

Quality: 4.5

Yield: 0.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Cencor

A-Score: 5.9/10

Value: 3.4

Growth: 6.7

Quality: 4.3

Yield: 2.0

Momentum: 9.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Regeneron Pharmaceuticals

A-Score: 4.9/10

Value: 4.0

Growth: 6.4

Quality: 8.8

Yield: 0.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

226.35$

Current Price

226.35$

Potential

0.00%

Expected Cash-Flows