BofA raises Cardinal Health stock price target to $170

On Tuesday, BofA Securities analyst Michael Cherny increased the price target for Cardinal Health (NYSE:CAH) shares to $170.00, up from the previous $165.00, while reiterating a Buy rating on the stock. The company, currently valued at $36.7 billion, has demonstrated remarkable momentum with a 58% return over the past year. According to InvestingPro analysis, Cardinal Health’s stock is trading near its 52-week high of $157.82, suggesting strong market confidence. The adjustment comes ahead of Cardinal Health’s investor day scheduled for June 12, 2025, in New York, where the company is expected to present an updated business outlook.

Cherny noted that expectations are particularly high for the upcoming event due to Cardinal Health’s strong performance over the past two years, coupled with favorable industry trends such as increased utilization and changes related to the Inflation Reduction Act (IRA) that affect out-of-pocket expenses. InvestingPro data reveals the company maintains a "GREAT" financial health score of 3.25, with particularly strong metrics in profitability and price momentum. The company has also maintained dividend payments for 43 consecutive years, demonstrating consistent financial stability. Analysts anticipate that Cardinal Health will outline the fundamentals for achieving sustainable double-digit earnings per share (EPS) growth and will likely announce positive adjustments to its Pharmaceutical (TADAWUL:2070) and Specialty Solutions EBIT growth projections.

The company also plans to update investors on its recent investments in specialty areas, including Specialty Networks and management services organization (MSO) platform investments. These updates were discussed in a recent call with an executive from the Community Oncology Alliance, highlighting Cardinal Health’s strategy for growth and potential further consolidation in the sector.

The raised price objective to $170 is based on a 20 times multiple of the company’s projected CY25E EPS, an increase from the previous 19 times multiple, reflecting higher peer multiples. This valuation adjustment underscores BofA Securities’ confidence in Cardinal Health’s future financial performance and its position within the healthcare industry. With an expected EPS of $8.26 for FY2025 and trading at a relatively low P/E ratio compared to its growth prospects, InvestingPro’s Fair Value analysis suggests the stock may still be undervalued. For deeper insights into Cardinal Health’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In other recent news, Citius Oncology has entered into a distribution agreement with Cardinal Health to facilitate the U.S. launch of LYMPHIR™, an FDA-approved immunotherapy for treating relapsed or refractory cutaneous T-cell lymphoma. This partnership is a strategic move for Citius Oncology, aiming to enhance the availability and delivery of LYMPHIR™ to healthcare providers and patients. Cardinal Health will act as an authorized distributor, supporting the commercialization of this treatment. Meanwhile, Wells Fargo (NYSE:WFC) upgraded Cardinal Health’s stock to Overweight from Equal Weight, citing improved valuation and business execution, with an increased price target of $179. Analysts highlighted Cardinal Health’s expected core EBIT growth of 14% for fiscal year 2025 and raised earnings per share estimates for the coming years. Additionally, Evercore ISI lifted Cardinal Health’s stock price target to $175, maintaining an Outperform rating, and noted confidence in the company’s growth strategy. Cardinal Health also announced an increase in its quarterly dividend to $0.5107 per share, reflecting its commitment to delivering shareholder value.

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