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Cardinal Health Inc.

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Over the last year, Cardinal Health has underperformed the broader industry with respect to price. Increasing generic pricing pressure is a major headwind. Intensifying competition and customer concentration are other bottlenecks. A sluggish macroeconomic scenario and tough product pricing environment are likely to impede growth. Meanwhile, the company is banking on strategic buyouts, joint ventures and supply agreements to drive growth. A solid fiscal 2018 guidance instills our confidence in the stock. Also, Cardinal Health ended fourth-quarter fiscal 2017 on a solid note, courtesy of an encouraging performance at the Medical segment. Although, the Pharmaceutical segment witnessed strong growth in the Specialty business and gained a huge number of Pharmaceutical Distribution customers, profits at the segment were hurt by generic pharmaceutical pricing and the loss of a major Pharmaceutical Distribution customer.


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