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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 has been driven by its strong Q1 2026 earnings, which beat estimates with adjusted earnings of $2.55 per share. The company's broad-based growth and rising profits across all business segments fueled the earnings beat. Additionally, Cardinal Health's transformation into a specialty-focused healthcare leader, leveraging acquisitions and managed services, has contributed to its growth. The company's robust free cash flow and operational leverage have also supported ongoing investments and shareholder returns. Its valuation remains at a discount to peers despite solid fundamentals.

1.c. Company Highlights

2. Cardinal Health's Strong Q1 FY2026 Earnings Driven by Pharmaceutical and Specialty Solutions

Cardinal Health, Inc. reported a robust first quarter for fiscal year 2026, with revenue increasing 22% to $64 billion and gross profit growing 22% to $2.3 billion. The company's earnings per share (EPS) came in at $2.55, significantly beating analyst estimates of $2.18. The Pharmaceutical and Specialty Solutions segment was the main driver of this performance, with a 23% revenue increase to $59 billion, driven by Brand and Specialty Pharmaceutical sales growth. Operating earnings grew 37%, and EPS increased 36%, reflecting the company's disciplined execution of its strategic priorities.

Publication Date: Nov -02

📋 Highlights
  • Operating earnings and EPS growth: Operating earnings rose 37% to $2.3 billion, while EPS increased 36% to $9.50, driven by strategic execution and resilient business model.
  • Revenue and gross profit surge: Revenue hit $64 billion (+22%), with gross profit climbing 22% to $2.3 billion, reflecting strong demand and cost discipline.
  • EPS guidance raised: Full-year EPS guidance increased to $9.65–$9.85 (+$0.35), fueled by demand trends and Solaris Health acquisition progress.
  • Pharmaceutical segment growth: Revenue jumped 23% to $59 billion, with segment profit up 26% to $667 million from Brand/ Specialty growth and MSO platforms.
  • At-Home business expansion: At-Home Solutions revenue surged 51% (+$500M in shareholder returns) due to ADSG acquisition, bolstering high-margin growth.

Segment Performance

The Pharmaceutical and Specialty Solutions segment profit increased by 26% to $667 million, driven by contributions from Brand and Specialty Products and MSO platforms. Other growth businesses, including at-Home Solutions, Nuclear, and Precision Health Solutions, also delivered strong results, demonstrating their increasingly important role in the company's long-term strategy. The at-Home business saw 51% revenue growth in Q1, driven by the acquisition of ADSG.

Guidance and Outlook

Cardinal Health raised its full-year EPS guidance to a range of $9.65 to $9.85, a $0.35 increase, reflecting the positive demand trends and the anticipated closing of the Solaris Health acquisition. The company also increased its adjusted free cash flow guidance to a range of $3 billion to $3.5 billion. Analysts estimate next year's revenue growth at 13.6%, indicating a continued strong trajectory for the company.

Valuation

With a P/E Ratio of 28.47 and an EV/EBITDA of 16.48, Cardinal Health's valuation appears reasonable considering its growth prospects. The company's ROIC of 11.77% indicates a strong ability to generate returns on invested capital. However, the ROE of -55.72% is a concern, likely due to one-time items or accounting adjustments. The Dividend Yield of 1.07% provides a relatively stable return for shareholders.

Acquisition and Integration

The company's acquisition of Solaris Health is expected to close shortly and will further accelerate its specialty growth strategy. Cardinal Health is committed to integrating back-office operations and systems, which is critical to its goal of building the best customer experience in the industry. The company is also investing in its distribution network and technology-driven platform to drive growth and operational efficiency.

3. NewsRoom

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Cardinal Health, Inc. (CAH) Presents at Citi Annual Global Healthcare Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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Cardinal Health, Inc. (CAH) Presents at Evercore 8th Annual Healthcare Conference Transcript

Dec -02

Source: seekingalpha.com

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4 Stocks With High Coverage Ratios Offer Safer Bets Going Into 2026

Dec -01

Source: zacks.com

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Potentially 12%-15% Consistent Income: Monthly Options Series (December 2025)

Nov -30

Source: seekingalpha.com

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Best Dividend Aristocrats For December 2025

Nov -29

Source: seekingalpha.com

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Buy These 5 Dividend Growth Stocks as Wall Street Rebounds

Nov -24

Source: zacks.com

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Athena Investment Management Has $288,000 Stock Position in Cardinal Health, Inc. $CAH

Nov -20

Source: defenseworld.net

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Stop Sleeping on These 3 Stocks (Seriously)

Nov -19

Source: fool.com

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
AbbVie

A-Score: 6.6/10

Value: 3.0

Growth: 4.7

Quality: 7.5

Yield: 7.0

Momentum: 8.5

Volatility: 9.0

1-Year Total Return ->

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J&J

A-Score: 6.4/10

Value: 3.0

Growth: 4.0

Quality: 7.7

Yield: 6.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Cardinal Health

A-Score: 6.3/10

Value: 5.9

Growth: 6.6

Quality: 4.5

Yield: 4.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
McKesson

A-Score: 6.2/10

Value: 5.4

Growth: 8.3

Quality: 4.5

Yield: 0.0

Momentum: 9.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Cencor

A-Score: 5.7/10

Value: 2.8

Growth: 6.8

Quality: 4.0

Yield: 2.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Regeneron Pharmaceuticals

A-Score: 4.2/10

Value: 4.2

Growth: 6.4

Quality: 8.6

Yield: 0.0

Momentum: 0.5

Volatility: 5.7

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

198.83$

Current Price

198.83$

Potential

0.00%

Expected Cash-Flows