Mizuho Securities analyst Ann Hynes has maintained their neutral stance on CAH stock, giving a Hold rating on February 1.
Geoff Meacham has given his Hold rating due to a combination of factors surrounding Cardinal Health’s recent financial performance and future projections. The company demonstrated a significant increase in free cash flow, which grew by 110% year-over-year, and exceeded expectations in their share repurchase program, buying back an additional $250 million in shares. However, this positive news was tempered by a reduced earnings forecast in their Medical segment, which was impacted by one-time adjustments. Despite this, the overall growth in earnings per share (EPS) and the anticipation of continued profitability in the Medical segment by FY26 contribute to the rationale behind the Hold rating.
The valuation of Cardinal Health’s stock also played a role in Meacham’s decision to maintain a Neutral stance. The raised EPS estimates for FY24 and FY25, along with the introduction of an FY26 adjusted EPS forecast, suggest a positive outlook. Nevertheless, the current price target is rooted in a valuation that is slightly above the distributor group’s five-year high, based on a blended approach of price-to-earnings (P/E), enterprise value to EBITDA (EV/EBITDA), and free cash flow to EV (FCF/EV) metrics. This valuation, coupled with the company’s solid quarter performance yet slight misses in segment operating profits, underpins the decision to uphold a Hold rating at a price target of $104.
According to TipRanks, Hynes is a 5-star analyst with an average return of 7.4% and a 60.98% success rate. Hynes covers the Healthcare sector, focusing on stocks such as HCA Healthcare, UnitedHealth, and CVS Health.
In another report released on February 1, Evercore ISI also maintained a Hold rating on the stock with a $110.00 price target.
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Cardinal Health (CAH) Company Description:
Cardinal Health, Inc. is a healthcare services and products company, which engages in the provision of customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices. It also provides medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency. The company operates through the following segments: Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products. The Medical segment manufactures, sources and distributes cardinal health branded medical, surgical and laboratory products. The company was founded by Robert D. Walter in 1979 and is headquartered in Dublin, OH.
Read More on CAH:
- Cardinal Health price target raised to $109 from $96 at TD Cowen
- Cardinal Health price target raised to $133 from $128 at Baird
- Cardinal Health Executives to Discuss Quarterly Results and Outlook
- Cardinal Health price target raised to $115 from $112 at BofA
- Cardinal Health raises FY24 EPS view to $7.20 to $7.35 from $6.75-$7.00
