Cardinal Health (CAH) AI Stock Analysis

• Market Cap: $48.91B
• Dividend Yield: 0.98%
• Average Volume (3M): 1.68M
• Price to Earnings (P/E): 25.7
• Beta (1Y): 0.38
• Revenue Growth: 4.37%
• EPS Growth: 28.48%
• Country: US
• Employees: 57,700
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Distribution
• EPS (TTM): 2.63
• Shares Outstanding: 235,316,010
• 10 Day Avg. Volume: 1,964,202
• 30 Day Avg. Volume: 1,683,283
• PEG Ratio: 0.30
• Price to Book (P/B): -14.56
• Price to Sales (P/S): 0.18
• P/FCF Ratio: 21.89
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 6.19
• Enterprise Value/Ebitda: 16.97
• 1Y Price Target: $250.50
• Price Target Upside: 20.53% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 10.29
• Revenue Forecast (FY): $258.60B

• Rating: 65 Neutral
• Price Target: $223.00 ▲(7.30% Upside)
• Action: Downgraded Date: 03/23/26
• Date: Action: Downgraded 03/23/26

The score is supported primarily by strong earnings momentum and raised FY26 guidance from the latest earnings call, plus robust free-cash-flow generation. Offsetting these positives are meaningful balance-sheet risk (negative equity and elevated leverage) and weak near-term technical momentum (negative MACD and price below key moving averages). Valuation is neutral-to-slightly-stretched with a modest dividend yield.

Positive Factors

Strong free cash flow

Large, growing free cash flow (TTM FCF $5.5B; +23.7%) provides durable ability to service debt, fund capex, execute buybacks and dividends, and absorb working-capital swings inherent in distribution. This cash engine supports strategic flexibility over the next 2–6 months.

Pharma & Specialty leadership

A scaled specialty distribution franchise, MSO platform rollups, and new patient-support wins drive structurally higher-margin volumes. Specialty growth to >$50B underpins multi-year revenue and profit expansion, reducing dependence on low-margin commodity drug flows.

Operational service gains and scale

Sustained investments in technology, e-commerce and distribution footprint improving service levels by ~10% boost customer retention and efficiency. Scale in logistics and improved service is a durable competitive advantage in healthcare distribution, supporting margins and contract wins.

Negative Factors

Elevated leverage & negative equity

High absolute debt and negative shareholders' equity materially weaken the balance sheet cushion. This reduces financial flexibility, increases refinancing and covenant risk if cash flow weakens, and constrains capital allocation choices during adverse cycles.

Very thin margins

Extremely narrow operating and net margins make earnings highly sensitive to cost, pricing or volume shocks. Small adverse shifts in procurement, tariffs, or SG&A can meaningfully compress profits, requiring ongoing tight execution to sustain earnings over coming months.

Revenue sensitivity to pricing/tariffs

Structural drug-pricing reforms (WAC reductions) and tariffs create top-line risk in a distribution model where revenue is linked to manufacturer pricing. Even if margins are contractually protected, lower WAC and tariff costs can reduce scale economics and visibility into revenue growth.

Cardinal Health Business Overview & Revenue Model

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.

How the Company Makes Money

Cardinal Health makes money mainly by selling and distributing healthcare products through two primary operating segments: Pharmaceutical and Specialty Solutions, and Global Medical Products and Distribution. In its Pharmaceutical and Specialty Solutions business, Cardinal Health generates revenue by purchasing branded and generic pharmaceuticals from manufacturers and distributing them to retail pharmacies (including national and regional chains and independents), hospitals, health systems, and other provider and pharmacy customers. This segment also includes specialty distribution and related services for higher-complexity therapies (for example, specialty pharmaceuticals distributed to specialty pharmacies and provider practices). In its Global Medical Products and Distribution business, Cardinal Health earns revenue from distributing medical, surgical, and laboratory products sourced from third-party manufacturers, as well as from selling Cardinal Health-branded medical products. Across both segments, revenue is driven by product sales volumes and service relationships with healthcare providers, while profitability is influenced by distribution economics such as procurement terms, service/fee arrangements, product mix (e.g., generics vs. branded drugs and higher-margin medical products), customer contract structures, and operating efficiency in warehousing, transportation, and inventory management. Significant factors that contribute to earnings include long-term supply relationships with pharmaceutical and medical-product manufacturers, customer purchasing agreements with pharmacies and healthcare providers, and the company’s ability to operate at scale in logistics and distribution.

Cardinal Health Financial Statement Overview

Summary

Operating performance and cash generation are solid (income statement score 72; cash flow score 78, with $5.5B TTM free cash flow and strong growth), but balance-sheet risk is a major offset (balance sheet score 34) due to elevated debt and negative shareholders’ equity, reducing financial flexibility despite improving earnings.

Income Statement

TTM (Trailing-Twelve-Months) revenue rose 4.3% to $244.5B, showing steady top-line momentum after a slight decline in FY2025. Profitability has improved meaningfully versus FY2022–FY2023, with TTM net income at $1.7B and margins trending higher than prior years, but overall margins remain very thin (TTM net margin ~0.7% and EBITDA margin ~1.3%), leaving results more sensitive to cost pressure and execution.

Balance Sheet

Leverage is elevated with $9.0B of total debt in TTM, and the balance sheet is pressured by negative shareholders’ equity (about -$2.9B), which weakens financial flexibility and makes equity-based leverage and return measures less meaningful/less supportive. While total assets are sizable ($58.1B TTM), the negative equity position is a key risk factor if operating conditions tighten or working-capital needs rise.

Cash Flow

Cash generation is a clear strength: TTM operating cash flow was $6.1B and free cash flow was $5.5B, with strong free-cash-flow growth (+23.7%). Free cash flow is large relative to reported earnings (about 90% of net income), supporting debt service and capital returns, though cash flow can still be exposed to working-capital swings inherent in distribution models.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	244.49B	222.58B	226.83B	204.98B	181.33B	162.47B
Gross Profit	8.86B	8.17B	7.41B	6.89B	6.48B	6.78B
EBITDA	3.23B	3.11B	1.96B	1.44B	55.00M	1.29B
Net Income	1.67B	1.56B	852.00M	330.00M	-938.00M	611.00M
Balance Sheet
Total Assets	58.08B	53.12B	45.12B	43.35B	43.88B	44.45B
Cash, Cash Equivalents and Short-Term Investments	2.78B	3.87B	5.13B	4.08B	4.72B	3.41B
Total Debt	9.03B	9.35B	5.61B	5.18B	5.80B	6.71B
Total Liabilities	60.78B	55.76B	48.33B	46.31B	44.58B	42.66B
Stockholders Equity	-2.70B	-2.78B	-3.21B	-2.96B	-709.00M	1.79B
Cash Flow
Free Cash Flow	5.51B	1.85B	3.25B	2.36B	2.73B	2.03B
Operating Cash Flow	6.10B	2.40B	3.76B	2.84B	3.12B	2.43B
Investing Cash Flow	-6.66B	-5.61B	-1.85B	-454.00M	567.00M	-378.00M
Financing Cash Flow	-468.00M	1.95B	-847.00M	-3.05B	-2.46B	-1.32B

Cardinal Health Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 207.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAH, the sentiment is Neutral. The current price of 207.83 is below the 20-day moving average (MA) of 220.10, below the 50-day MA of 217.05, and above the 200-day MA of 181.96, indicating a neutral trend. The MACD of -2.07 indicates Positive momentum. The RSI at 36.61 is Neutral, neither overbought nor oversold. The STOCH value of 7.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CAH.

Cardinal Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCK	74 Outperform	$108.50B	21.30	-245.27%	0.37%	17.23%	66.17%
PBH	72 Outperform	$2.89B	15.81	11.29%	―	-0.02%	-1.87%
CAH	65 Neutral	$48.91B	25.74	-58.93%	0.98%	4.37%	28.48%
HSIC	65 Neutral	$8.29B	23.11	11.39%	―	3.51%	29.65%
COR	64 Neutral	$63.59B	29.30	101.43%	0.66%	9.31%	5.92%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Cardinal Health Corporate Events

Cardinal Health Announces Board Chair Transition and Outlook

Cardinal Health, based in Dublin, Ohio, is a major distributor of pharmaceuticals and specialty products, a global manufacturer and distributor of medical and laboratory supplies, and a supplier of home-health and direct-to-patient products and services. The company also operates nuclear pharmacies and manufacturing facilities and provides performance and data solutions for healthcare customers worldwide.

This diversified healthcare services and products portfolio positions Cardinal Health as a critical link in the medical supply chain, serving hospitals, pharmacies, laboratories and home-care providers. Its customer-centric model and focus on operational efficiency and innovation underpin its role as an infrastructure backbone for the healthcare industry.

Cardinal Health announced that long-serving director Gregory B. Kenny, a board member since 2007 and chairman since 2018, notified the company on March 17, 2026, of his decision to retire from the board, all committees and the chair role, effective March 20, 2026. The company emphasized that Kenny’s retirement was not due to any disagreement over operations, policies or practices.

Effective immediately following his retirement, the board appointed existing director Patricia A. Hemingway Hall as chair, highlighting her deep institutional knowledge, nearly seven-year tenure as head of the Governance and Sustainability Committee and prior experience as CEO of Health Care Service Corporation. The leadership transition underscores Cardinal Health’s emphasis on strong governance continuity as it pursues long-term value creation and strategic priorities.

The company credited Kenny with guiding Cardinal Health through significant transformation, including strategic portfolio evolution and operational improvement initiatives during his chairmanship. Management expressed confidence that Hemingway Hall will continue this trajectory as the board oversees ongoing execution of the company’s strategy.

Cardinal Health also said it will report third-quarter fiscal 2026 results on April 30, 2026, and reaffirmed its confidence in its fiscal 2026 outlook. The reaffirmation signals management’s continued positive view of operational and financial performance despite leadership changes at the board level.

The most recent analyst rating on (CAH) stock is a Buy with a $258.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.

Cardinal Health Announces Planned Chief Accounting Officer Transition

On March 2, 2026, Cardinal Health announced that Senior Vice President and Chief Accounting Officer Mary Scherer plans to retire in February 2027, marking a scheduled leadership transition in its finance organization. The company will launch a search for her successor, and Scherer will remain in her role until the new Chief Accounting Officer is identified and onboarded to support continuity and a smooth transition in Cardinal Health’s accounting and reporting functions.

The retirement plan, disclosed on March 5, 2026, underscores Cardinal Health’s intent to manage executive turnover in a measured way, limiting disruption to its financial oversight. Maintaining Scherer in place through the transition is designed to preserve stability in financial controls and regulatory reporting, which is important for investors, lenders, and other stakeholders who rely on consistent, well-governed accounting practices at the company.

The most recent analyst rating on (CAH) stock is a Buy with a $258.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.

Cardinal Health posts strong Q2 results, raises guidance

On February 5, 2026, Cardinal Health reported strong second-quarter fiscal 2026 results, with revenue rising 19% year over year to $65.6 billion, GAAP operating earnings up 29% to $707 million and non-GAAP operating earnings up 38% to $877 million, driving a 36% increase in non-GAAP diluted EPS to $2.63. The Pharmaceutical and Specialty Solutions segment remained the main growth engine, with revenue up 19% to $60.7 billion and segment profit up 29% to $687 million, supported by brand and specialty drug sales, acquisitions of MSO platforms and positive generics performance, while the Global Medical Products and Distribution segment delivered 3% revenue growth to $3.3 billion and a 106% jump in profit to $37 million on customer volume growth and cost optimization efforts. Reflecting this broad-based profit expansion and a lower share count, the company raised its fiscal 2026 non-GAAP EPS guidance to $10.15–$10.35, completed a $750 million baseline share repurchase and reached its targeted leverage range, signaling increased financial flexibility and confidence in ongoing operational momentum.

The most recent analyst rating on (CAH) stock is a Buy with a $245.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.

Cardinal Health Raises 2026 EPS Outlook, Highlights Growth

On January 13, 2026, Cardinal Health raised its fiscal 2026 non-GAAP diluted earnings per share outlook to at least $10.00, up from a prior range of $9.65 to $9.85, citing strong performance across its five operating segments and signaling continued operational momentum ahead of a detailed update on February 5. The company also projected that its Specialty revenues would exceed $50 billion in fiscal 2026, reflecting a three-year compounded annual growth rate of 16%, underpinned by robust demand in specialty distribution, expansion of its management services organization platforms and more than 30% anticipated revenue growth in BioPharma Solutions, including major new patient-support hub wins such as Sanofi and Regeneron’s Dupixent My Way program. In addition, Cardinal Health reported it had successfully transitioned manufacturer distribution service agreements for all branded drugs affected by the 2026 Medicare Drug Price Negotiation Program before the January 1 implementation, aiming to preserve compensation for its distribution role, and launched the ContinuCare Pathway program within its at-Home Solutions business to streamline medical-benefit diabetes supply delivery through a pharmacy-to-supplier referral model, already adopted by Publix’s nearly 1,400 pharmacies and expanding the program’s reach to more than 11,000 retail and grocery pharmacies. These moves, highlighted during the 44th Annual J.P. Morgan Healthcare Conference on January 13, 2026, underscore Cardinal Health’s efforts to strengthen its specialty and direct-to-patient platforms while adapting early to U.S. drug pricing reforms, with implications for earnings visibility and competitive positioning across its healthcare distribution and services portfolio.

The most recent analyst rating on (CAH) stock is a Buy with a $244.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.