Cardinal Health Set to Report Earnings: Analysts Offer Mixed Insights
Cardinal Health, Inc. (CAH), based in Dublin, Ohio, is a healthcare services and products company. It specializes in providing tailored solutions for hospitals, pharmacies, and patients at home. With a current market cap of $27.3 billion, the company is poised to release its fiscal Q1 earnings results before the market opens on Friday, Nov. 1.
Analysts forecast that the drug distributor will report a profit of $1.64 per share, reflecting a decline of 5.2% from last year’s $1.73 per share. Importantly, Cardinal Health has a history of exceeding Wall Street’s earnings expectations, having managed to accomplish this in the past four quarters.
In its most recent Q4 for 2024, Cardinal Health reported earnings per share (EPS) of $1.84, which was nearly 7% above consensus estimates. This represented a 29% improvement from the same quarter last year, largely driven by strong growth in the pharmaceutical division and increased profits across other segments.
Looking ahead to fiscal 2025, analysts anticipate that CAH will achieve an EPS of $7.61, an increase of 1.1% from $7.53 in fiscal 2024. EPS growth is projected to accelerate to 10.5%, reaching $8.41 in fiscal 2026.
Year-to-date, shares of CAH have increased by 11.7%. However, this lags behind the S&P 500 Index, which has seen a 22.5% rise, and the Health Care Select Sector SPDR Fund (XLV) with a 12.4% gain over the same timeframe.
CAH’s underperformance can be attributed to challenges in 2024, including the loss of a key contract with UnitedHealth Group’s OptumRX, which contributed 16% of its revenue in 2023.
Despite these issues, shares of CAH surged by 3.7% on Aug. 14 following the release of its strong Q4 and full-year 2024 results. The company’s revenue hit $59.9 billion in Q4, surpassing Wall Street’s expectation of $58.72 billion and marking a 12% increase from the same quarter the previous year. Its operating cash flow for fiscal 2024 reached an impressive $3.8 billion, while adjusted free cash flow hit $3.9 billion, both record highs.
On Oct. 7, T2 Biosystems, Inc. (TTOO), known for its rapid sepsis diagnostics, announced it has struck an exclusive distribution agreement with Cardinal Health. This arrangement grants CAH exclusive rights to market and sell T2’s FDA-cleared direct-from-blood diagnostics in the U.S.
The general consensus from analysts on Cardinal Health’s stock remains cautiously optimistic, earning a “Moderate Buy” rating. Of the 15 analysts monitoring the stock, five suggest a “Strong Buy,” one opts for a “Moderate Buy,” eight recommend a “Hold,” and one offers a “Strong Sell.” The average price target for CAH stands at $118.73, suggesting a potential upside of 5.5% from current prices.
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On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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