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Cardinal Health (CAH) Stock Sinks As Market Gains: Here's Why

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Cardinal Health (CAH - Free Report) closed at $150.27 in the latest trading session, marking a -1.29% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.47% for the day. Elsewhere, the Dow saw an upswing of 0.11%, while the tech-heavy Nasdaq appreciated by 0.94%.

Prior to today's trading, shares of the prescription drug distributor had gained 1.76% lagged the Medical sector's gain of 5.49% and the S&P 500's gain of 2.32%.

The upcoming earnings release of Cardinal Health will be of great interest to investors. The company's upcoming EPS is projected at $2.22, signifying a 18.09% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $59.05 billion, up 12.96% from the prior-year quarter.

CAH's full-year Zacks Consensus Estimates are calling for earnings of $9.41 per share and revenue of $249.31 billion. These results would represent year-over-year changes of +14.2% and +12.01%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Cardinal Health. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.48% higher. Cardinal Health currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Cardinal Health is presently being traded at a Forward P/E ratio of 16.17. This represents a premium compared to its industry average Forward P/E of 14.29.

It is also worth noting that CAH currently has a PEG ratio of 1.29. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Medical - Dental Supplies industry had an average PEG ratio of 1.75 as trading concluded yesterday.

The Medical - Dental Supplies industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 95, finds itself in the top 39% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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