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Cardinal Health (CAH) Outpaces Stock Market Gains: What You Should Know

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Cardinal Health (CAH - Free Report) closed the most recent trading day at $46.79, moving +0.88% from the previous trading session. This change outpaced the S&P 500's 0.66% gain on the day. Elsewhere, the Dow gained 1.03%, while the tech-heavy Nasdaq added 0.46%.

Coming into today, shares of the prescription drug distributor had lost 8.7% in the past month. In that same time, the Medical sector lost 0.8%, while the S&P 500 gained 3.97%.

Investors will be hoping for strength from CAH as it approaches its next earnings release. The company is expected to report EPS of $1.45, up 4.32% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $35.14 billion, up 4.49% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.08 per share and revenue of $145 billion. These totals would mark changes of +1.6% and +5.99%, respectively, from last year.

Any recent changes to analyst estimates for CAH should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.49% higher within the past month. CAH is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that CAH has a Forward P/E ratio of 9.13 right now. For comparison, its industry has an average Forward P/E of 21.85, which means CAH is trading at a discount to the group.

It is also worth noting that CAH currently has a PEG ratio of 1.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - Dental Supplies was holding an average PEG ratio of 2.27 at yesterday's closing price.

The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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