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Here's Why You Should Invest in Cardinal Health (CAH) Stock
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Cardinal Health Inc. (CAH - Free Report) is well-poised for growth on the back of a diversified product portfolio, acquisition-driven strategy and robust pharmaceutical segment.
The stock has gained 4.4% compared with the industry’s growth of 2.4% in the past month. Further, the S&P 500 Index has rallied 4.4% in the same time frame.
The company — with a market capitalization of $16.26 billion — is a nation-wide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. It anticipates earnings to improve 5.4% over the next five years. Moreover, Cardinal Health beat estimates in each of the trailing four quarters, the average surprise being 21.4%.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).
Key Catalysts
Cardinal Health’s Medical and Pharmaceutical offerings provide it with a competitive edge in the niche space. It offers industry expertise through an expanding portfolio of safe products.
The company follows an acquisition-driven strategy and remains committed toward investment in key growth businesses to gain market traction and bolster profits.
Cardinal Health’s Pharmaceutical segment is the second-largest pharmaceutical distributor in the United States. The segment’s products and services comprise pharmaceutical distribution, manufacturer and specialty solutions along with nuclear and pharmacy offerings. The segment’s strength is anticipated to drive its performance in the days ahead.
In the first quarter of fiscal 2021, pharmaceutical revenues rose 5% to $35.11 billion on a year-over-year basis. The upside can be attributed to growth in sales from Pharmaceutical Distribution and Specialty Solutions customers. Despite the decline in volumes related to COVID-19, the segment witnessed an increase of 1% in profits to $402 million, driven by an increase in contribution from brand sales mix.
For fiscal 2021, the company expects the Pharmaceutical segment to witness a mid-single-digit percentage improvement in revenues and low-single-digit percentage growth with respect to profit. Higher contributions from key growth areas — Specialty and Connected Care — and sustained market dynamics within its generics program are anticipated to bolster the segment.
Which Way Are Estimates Headed?
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $160.72 billion, indicating an improvement of 5.1% from the previous year’s reported number. The same for adjusted earnings per share stands at $5.83, suggesting a rise of 6.9% from the year-ago reported figure.
Merit Medical has a projected long-term earnings growth rate of 12.6%.
Align Technology has an estimated long-term earnings growth rate of 18.3%.
Thermo Fisher has a projected long-term earnings growth rate of 18%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Here's Why You Should Invest in Cardinal Health (CAH) Stock
Cardinal Health Inc. (CAH - Free Report) is well-poised for growth on the back of a diversified product portfolio, acquisition-driven strategy and robust pharmaceutical segment.
The stock has gained 4.4% compared with the industry’s growth of 2.4% in the past month. Further, the S&P 500 Index has rallied 4.4% in the same time frame.
The company — with a market capitalization of $16.26 billion — is a nation-wide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. It anticipates earnings to improve 5.4% over the next five years. Moreover, Cardinal Health beat estimates in each of the trailing four quarters, the average surprise being 21.4%.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).
Key Catalysts
Cardinal Health’s Medical and Pharmaceutical offerings provide it with a competitive edge in the niche space. It offers industry expertise through an expanding portfolio of safe products.
The company follows an acquisition-driven strategy and remains committed toward investment in key growth businesses to gain market traction and bolster profits.
Cardinal Health’s Pharmaceutical segment is the second-largest pharmaceutical distributor in the United States. The segment’s products and services comprise pharmaceutical distribution, manufacturer and specialty solutions along with nuclear and pharmacy offerings. The segment’s strength is anticipated to drive its performance in the days ahead.
In the first quarter of fiscal 2021, pharmaceutical revenues rose 5% to $35.11 billion on a year-over-year basis. The upside can be attributed to growth in sales from Pharmaceutical Distribution and Specialty Solutions customers. Despite the decline in volumes related to COVID-19, the segment witnessed an increase of 1% in profits to $402 million, driven by an increase in contribution from brand sales mix.
For fiscal 2021, the company expects the Pharmaceutical segment to witness a mid-single-digit percentage improvement in revenues and low-single-digit percentage growth with respect to profit. Higher contributions from key growth areas — Specialty and Connected Care — and sustained market dynamics within its generics program are anticipated to bolster the segment.
Which Way Are Estimates Headed?
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $160.72 billion, indicating an improvement of 5.1% from the previous year’s reported number. The same for adjusted earnings per share stands at $5.83, suggesting a rise of 6.9% from the year-ago reported figure.
Other Stocks to Consider
Some other top-ranked stocks from the broader medical space are Merit Medical Systems, Inc. (MMSI - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Thermo Fisher Scientific Inc. (TMO - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical has a projected long-term earnings growth rate of 12.6%.
Align Technology has an estimated long-term earnings growth rate of 18.3%.
Thermo Fisher has a projected long-term earnings growth rate of 18%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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