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UBS reiterated a Buy rating on Cardinal Health (NYSE:CAH) while raising its price target to $185 from $170 on Monday. The healthcare giant, currently trading near its 52-week high of $162.94, has delivered an impressive 64% return over the past year. According to InvestingPro data, multiple analysts have recently revised their earnings estimates upward for the upcoming period.
The price target increase reflects UBS’s higher estimates for the healthcare services company, with the new target based on a 17x next-twelve-months plus 12-month estimate multiple, up from the previous 16x multiple.
UBS believes Cardinal Health shares should trade closer to peers, noting that CAH shares currently trade at 17x consensus next-twelve-months earnings per share.
This valuation is in-line with competitor Cerner (NASDAQ:CERN) (COR) and below McKesson (NYSE:MCK), which trades at 19x earnings, according to the research firm’s analysis.
The firm maintained its positive outlook on Cardinal Health with the Buy rating unchanged, focusing only on the price target adjustment in Monday’s research note.
In other recent news, Cardinal Health has raised its full-year adjusted earnings per share (EPS) forecast to a range of $8.15 to $8.20, surpassing analyst expectations. The company also provided preliminary guidance for fiscal year 2026, projecting adjusted EPS between $9.10 and $9.30, indicating a 13% growth at the midpoint compared to the current year’s outlook. During its Investor Day, Cardinal Health outlined a long-term target of a 12% to 14% compound annual growth rate for adjusted EPS from fiscal years 2026 through 2028. The company announced strategic initiatives, including investments in Biopharma Solutions and plans to build a new forward distribution center. Cardinal Health also entered a distribution services agreement with Citius Oncology to facilitate the U.S. launch of LYMPHIR™, an FDA-approved immunotherapy. Analysts from TD Cowen and BofA Securities have maintained their Buy ratings on Cardinal Health, with BofA raising the stock price target to $170. The company expects to generate at least $10 billion in total adjusted free cash flow over the next three years and increased its baseline share repurchase plans to at least $750 million per year.
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