Bank of America Securities analyst Allen Lutz reiterated a Buy rating on Cardinal Health (CAH – Research Report) today and set a price target of $170.00.
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Allen Lutz has given his Buy rating due to a combination of factors including Cardinal Health’s strong execution over the past two years and the presence of multiple industry tailwinds. The company is expected to provide an updated outlook during its investor day, which could reveal sustainable double-digit EPS growth and positive revisions in Pharmaceutical and Specialty Solutions EBIT growth. These developments are supported by recent investments in specialty networks and MSO platforms, which are anticipated to drive further growth and consolidation opportunities.
Furthermore, Cardinal Health is likely to raise its long-term Pharmaceutical EBIT growth guidance from 4-6% to 5-7% or more, driven by both industry and company-specific factors. The company’s scale disadvantage in specialty is diminishing, and recent mergers and acquisitions are expected to contribute to outsized growth compared to peers. Additionally, the company is projected to maintain a balanced capital allocation strategy, focusing on opportunistic M&A, share repurchases, and debt reduction, which supports the Buy rating.
Lutz covers the Healthcare sector, focusing on stocks such as Hims & Hers Health, DENTSPLY SIRONA, and McKesson. According to TipRanks, Lutz has an average return of 6.4% and a 60.59% success rate on recommended stocks.
In another report released on June 6, Mizuho Securities also maintained a Buy rating on the stock with a $161.00 price target.