We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Sustained Product Demand Drive CAH Stock Before Q4 Earnings?
Read MoreHide Full Article
Key Takeaways
CAH Q4 revenues are expected to rise 1.3% Y/Y to $60.67B on pharma volume and specialty strength.
CAH EPS is projected at $2.03, up 10.3% Y/Y, aided by profit growth and share buybacks.
CAH's medical segment recovery and at-home demand may offset macroeconomic headwinds.
Cardinal Health, Inc. (CAH - Free Report) is scheduled to report fourth-quarter fiscal 2025 results on Aug. 12, before market open.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of $2.35 surpassed the Zacks Consensus Estimate by 9.3%. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 10.3%.
Let’s check out the factors that might have shaped CAH’s performance prior to the announcement.
Factors to Note Prior to CAH’s Q4 Earnings Report
Cardinal Health's fiscal fourth-quarter numbers are likely to reflect continued momentum in the Pharmaceutical segment and signs of sustained recovery in Medical. Following a strong fiscal third quarter, where revenues rose 8% year over year and adjusted EPS grew 19%, the company appears poised to deliver another solid performance.
The fourth-quarter top line is likely to have been driven by robust performance in the Pharmaceutical segment, underpinned by strong volume trends in branded drugs and sustained momentum in specialty physician practices. Continued expansion of the Outcomes platform —now covering over 40,000 pharmacies — might have aided incremental revenues. Meanwhile, the Nuclear and Precision Health Solutions business is expected to have benefited from resilient demand trends.
In the Medical segment, Cardinal Health brand product volumes likely remained on a recovery path, supported by improved global supply chain execution and stability in manufacturing. With easier year-over-year comps, modest sequential revenue growth is anticipated. The At-Home Solutions business might have added to the incremental upside.
On the cost side, operating discipline and cost savings initiatives under the Medical Improvement Plan are expected to have supported margin stability. While SG&A normalization likely prevailed, performance-based compensation and IT investments might have partially offset gains. The quarterly results are unlikely to reflect any significant tariff-related headwind for the period.
Adjusted EPS is expected to have benefited from segment-level profit growth, lower interest expense and share repurchases. Cardinal Health has maintained its full-year adjusted EPS guidance of $7.20-$7.35.
Investors may ask questions related to updates on long-term strategic initiatives, particularly in specialty and medical product innovation.
CAH’s Estimate Picture
For fourth-quarter fiscal 2025, the Zacks Consensus Estimate for revenues is pegged at $60.67 billion, implying an improvement of 1.3% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $2.03, indicating an increase of 10.3% from the prior-year period’s reported number.
Image Source: Zacks Investment Research
What Our Model Suggests About Cardinal Health
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: Cardinal Health has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
So far this year, Cardinal Health’s shares have gained 29.7%, outperforming the Medical - Dental Supplies’ 3.9% decline. CAH’s shares have also outperformed the Zacks Medical sector’s 7.6% decline and the S&P 500’s 7.7% gain during the period.
YTD Price Comparison
Image Source: Zacks Investment Research
Cardinal Health’s peers like Becton Dickinson and Company (BDX - Free Report) , popularly known as BD,McKesson (MCK - Free Report) and Cencora (COR - Free Report) have all underperformed it. While MCK and COR’s shares have risen 16.4% and 23.9%, respectively, year-to-date, BDX’s shares have lost 17.3%.
Cardinal Health’s Key Valuation Metric
From a valuation standpoint, CAH’s forward 12-month price-to-earnings (P/E) is 16.5X, a premium to the industry's average of 15.9X.
The company is trading at a premium to its peers, BD and Cencora. However, Cardinal Health is trading at a discount to McKesson. Currently, BD and Cencora’s P/E ratio is 12.9X and 16.2X, respectively, while that for McKesson is 17.1X.
Image Source: Zacks Investment Research
CAH’s Long-Term Investment Visibility
This January, Cardinal Health announced that construction is underway for its new at-Home Solutions distribution center in Fort Worth, TX. The facility is equipped with leading robotics and automation technologies and is anticipated to be fully operational in the summer of 2025. This looks promising for the company’s future distribution chain.
In October 2024, Cardinal Health announced the opening of its new distribution center in Boylston, MA, supporting its U.S. Medical Products and Distribution business. It is likely to have increased the U.S. warehouse capacity and expand specialized handling capabilities, improving the supply-chain. This also looks promising for the stock as management believes that the location will strengthen CAH’s supply-chain resiliency and provide a more predictable, timely and stable experience for its New England customers and their growing needs.
However, the current unstable macroeconomic business environment and tariff uncertainties are likely to have weighed on the company’s fiscal fourth-quarter revenues, raising our apprehension.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Can Sustained Product Demand Drive CAH Stock Before Q4 Earnings?
Key Takeaways
Cardinal Health, Inc. (CAH - Free Report) is scheduled to report fourth-quarter fiscal 2025 results on Aug. 12, before market open.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of $2.35 surpassed the Zacks Consensus Estimate by 9.3%. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 10.3%.
Let’s check out the factors that might have shaped CAH’s performance prior to the announcement.
Factors to Note Prior to CAH’s Q4 Earnings Report
Cardinal Health's fiscal fourth-quarter numbers are likely to reflect continued momentum in the Pharmaceutical segment and signs of sustained recovery in Medical. Following a strong fiscal third quarter, where revenues rose 8% year over year and adjusted EPS grew 19%, the company appears poised to deliver another solid performance.
The fourth-quarter top line is likely to have been driven by robust performance in the Pharmaceutical segment, underpinned by strong volume trends in branded drugs and sustained momentum in specialty physician practices. Continued expansion of the Outcomes platform —now covering over 40,000 pharmacies — might have aided incremental revenues. Meanwhile, the Nuclear and Precision Health Solutions business is expected to have benefited from resilient demand trends.
In the Medical segment, Cardinal Health brand product volumes likely remained on a recovery path, supported by improved global supply chain execution and stability in manufacturing. With easier year-over-year comps, modest sequential revenue growth is anticipated. The At-Home Solutions business might have added to the incremental upside.
On the cost side, operating discipline and cost savings initiatives under the Medical Improvement Plan are expected to have supported margin stability. While SG&A normalization likely prevailed, performance-based compensation and IT investments might have partially offset gains. The quarterly results are unlikely to reflect any significant tariff-related headwind for the period.
Adjusted EPS is expected to have benefited from segment-level profit growth, lower interest expense and share repurchases. Cardinal Health has maintained its full-year adjusted EPS guidance of $7.20-$7.35.
Investors may ask questions related to updates on long-term strategic initiatives, particularly in specialty and medical product innovation.
CAH’s Estimate Picture
For fourth-quarter fiscal 2025, the Zacks Consensus Estimate for revenues is pegged at $60.67 billion, implying an improvement of 1.3% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $2.03, indicating an increase of 10.3% from the prior-year period’s reported number.
Image Source: Zacks Investment Research
What Our Model Suggests About Cardinal Health
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: Cardinal Health has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CAH’s Share Price Performance
So far this year, Cardinal Health’s shares have gained 29.7%, outperforming the Medical - Dental Supplies’ 3.9% decline. CAH’s shares have also outperformed the Zacks Medical sector’s 7.6% decline and the S&P 500’s 7.7% gain during the period.
YTD Price Comparison
Image Source: Zacks Investment Research
Cardinal Health’s peers like Becton Dickinson and Company (BDX - Free Report) , popularly known as BD,McKesson (MCK - Free Report) and Cencora (COR - Free Report) have all underperformed it. While MCK and COR’s shares have risen 16.4% and 23.9%, respectively, year-to-date, BDX’s shares have lost 17.3%.
Cardinal Health’s Key Valuation Metric
From a valuation standpoint, CAH’s forward 12-month price-to-earnings (P/E) is 16.5X, a premium to the industry's average of 15.9X.
The company is trading at a premium to its peers, BD and Cencora. However, Cardinal Health is trading at a discount to McKesson. Currently, BD and Cencora’s P/E ratio is 12.9X and 16.2X, respectively, while that for McKesson is 17.1X.
Image Source: Zacks Investment Research
CAH’s Long-Term Investment Visibility
This January, Cardinal Health announced that construction is underway for its new at-Home Solutions distribution center in Fort Worth, TX. The facility is equipped with leading robotics and automation technologies and is anticipated to be fully operational in the summer of 2025. This looks promising for the company’s future distribution chain.
In October 2024, Cardinal Health announced the opening of its new distribution center in Boylston, MA, supporting its U.S. Medical Products and Distribution business. It is likely to have increased the U.S. warehouse capacity and expand specialized handling capabilities, improving the supply-chain. This also looks promising for the stock as management believes that the location will strengthen CAH’s supply-chain resiliency and provide a more predictable, timely and stable experience for its New England customers and their growing needs.
However, the current unstable macroeconomic business environment and tariff uncertainties are likely to have weighed on the company’s fiscal fourth-quarter revenues, raising our apprehension.