Cardinal Health, Inc. (CAH)

Cardinal Health's stock has seen a significant increase, rising by 39.48% over the past six months and 40% year-to-date as of June 2025. This positive trend has been supported by several analyst upgrades from firms like Jefferies, TD Cowen, Evercore ISI Group, and B of A Securities. Wells Fargo also upgraded its outlook, and Morgan Stanley and BofA raised their price targets for the stock in June 2025. For the second quarter of fiscal year 2025, Cardinal Health exceeded profit expectations, driven by strong performance in its Pharmaceutical segment and "Other" businesses, leading to a raised EPS guidance. In the first quarter of fiscal year 2025, the company beat profit and sales estimates and raised its full-year EPS guidance, despite a revenue decline in its Pharmaceutical & Specialty Solutions unit due to the non-renewal of a distribution contract with pharmacy benefit manager OptumRx. New agreements, such as with Publix, are expected to partially offset the sales loss. Cardinal Health consistently pays quarterly dividends and has a history of increasing them year over year.

Cardinal Health's revenue cyclicality is low, with minimal seasonality, as sales are largely unassociated with broader macroeconomic trends due to the inelastic demand for prescription drugs. The quarterly cadence of profit can be influenced by seasonality and operational improvements, with the first quarter typically being the low point and the third quarter often the highest. The company experiences strong pharmaceutical demand across various product categories. Anticipated economic uncertainties could potentially lower volume during the holiday shopping "peak season," but overall demand for its core products remains robust. There is also increased demand for PET diagnostics and strong demand across its Nuclear, at-Home, and OptiFreight® businesses.

Cardinal Health, Inc. is a global, integrated healthcare services and products company headquartered in Dublin, Ohio, operating primarily in the healthcare sector within the Medical Distributors industry. Cardinal Health specializes in the distribution of pharmaceuticals and medical products, serving over 100,000 locations, including hospitals, pharmacies, ambulatory surgery centers, clinical laboratories, and physician offices. The company also manufactures medical and surgical products and provides services such as nuclear medicine services, pharmacy management, and supply chain solutions.

Cardinal Health has a substantial global presence, operating in over 100 countries, including the United States, Canada, Europe, Australia, China, and Japan. In the United States, Cardinal Health provides medical products to over 75% of hospitals and manages approximately 300 distribution centers.

Cardinal Health's brand reputation has been generally positive, reflected in strong analyst sentiment and positive market perception due to strong earnings and innovative services. The company was involved in opioid lawsuits, agreeing to a $6.4 billion settlement over 18 years in July 2021. The company's focus on sustainability and ethical practices is expected to further strengthen its brand value and customer loyalty, and its customer loyalty index score for U.S. Distribution has improved significantly from its pandemic low.

Cardinal Health's ownership is predominantly institutional, with institutional investors holding 86.74% of the company as of December 31, 2024. Major institutional owners include BlackRock, Inc., Vanguard Group Inc, State Street Corp, VTSMX, VFINX, Geode Capital Management, Llc, Morgan Stanley, Jpmorgan Chase & Co, and Fmr Llc. Retail investors hold around 35.33% of the company's stock, while insiders hold a small percentage (0.26%).