On Tuesday, Baird reaffirmed its Outperform rating and $134.00 price target for Cardinal Health (NYSE:CAH), a global, integrated healthcare services and products company. The firm's stance comes as Cardinal Health's stock has shown resilience despite market concerns, particularly regarding the potential impact of losing OptumRx, a pharmacy care services company.
The firm highlighted Cardinal Health's ability to withstand the loss of OptumRx, citing the company's robust market fundamentals, recent strong performance, and solid balance sheet and cash flow generation. These factors contribute to the company's capability to meet its long-term objectives.
Baird's analyst pointed out that the current valuation of Cardinal Health remains attractive, considering that the negative sentiment stemming from the United Healthcare (UNH) risk appears to be factored into the stock's year-to-date underperformance compared to its peers. Before the market opened on Tuesday, Cardinal Health's stock had increased by 7.3%, while the average gain among its peers stood at 14.9%.
Cardinal Health's stock performance has been closely monitored by investors, especially in light of the challenges faced within the healthcare sector. The firm's reiteration of confidence in the company's financial health and strategic outlook suggests that Cardinal Health is positioned to navigate through potential setbacks effectively.
The company's stock movement and Baird's reaffirmed rating and price target are of interest to shareholders and potential investors, as they reflect the firm's analysis of Cardinal Health's market position and future prospects. The stock market's response to these developments will continue to be observed as Cardinal Health progresses through the fiscal year.
InvestingPro Insights
In light of Baird's reaffirmed Outperform rating for Cardinal Health, recent data from InvestingPro underscores the company's financial resilience and potential for growth. Cardinal Health's management has been proactive in share buybacks, signaling confidence in the company's value (InvestingPro Tip). Additionally, with a strong history of dividend growth, having raised its dividend for an impressive 36 consecutive years, investors might find comfort in the company's commitment to returning value (InvestingPro Tip).
InvestingPro Data reveals a market capitalization of $25.01 billion, reflecting the company's substantial presence in the healthcare sector. The P/E Ratio stands at a reasonable 18.03 when adjusted for the last twelve months as of Q2 2024, suggesting that the stock may be trading at a low price relative to near-term earnings growth. Moreover, Cardinal Health boasts a robust revenue growth of 11.99% over the last twelve months as of Q2 2024, indicating a strong business performance amidst market challenges.
For those considering a deeper dive into Cardinal Health's financial health and future prospects, there are additional InvestingPro Tips available at https://www.investing.com/pro/CAH. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to a comprehensive set of metrics and insights that can inform investment decisions.
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