Cardinal Health (CAH) has received a new Buy rating, initiated by William Blair analyst, Max Smock.
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Max Smock has given his Buy rating due to a combination of factors tied to Cardinal Health’s evolving business mix and financial profile. He highlights that the company’s large-scale pharmaceutical distribution platform, together with its broad suite of nondistribution services, positions it to benefit from demographic trends such as an aging population, greater prevalence of chronic disease, and a steady flow of new drug launches.
In addition, he points to Cardinal’s differentiated “other” segment businesses, which he expects to grow faster and carry higher margins than traditional distribution, thereby enhancing the overall earnings trajectory. Supported by a solid balance sheet and strong free cash flow that funds both investment and share repurchases, Smock forecasts low- to mid-teens annual adjusted EPS growth and views the current valuation premium as justified by the firm’s transformation into a more embedded healthcare services and technology partner.
In another report released on April 13, Wells Fargo also assigned a Buy rating to the stock with a $256.00 price target.
Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CAH in relation to earlier this year.