On Wednesday, Mizuho (NYSE:MFG) Securities initiated coverage on shares of Cardinal Health (NYSE:NYSE:CAH) with an Outperform rating and a price target set at $139. The firm highlights Cardinal Health's sustained EBIT growth in its core ' Pharmaceutical (TADAWUL:2070) & Specialty' segment, which represents approximately 80% of the company's profits. This growth has been consistent over the past two fiscal years, from FY23 to FY24, and into the first quarter of FY25.
The price target of $139 is based on a 15 times price-to-earnings (P/E) ratio on the forecasted calendar year 2026 earnings per share (EPS) of $9.05. This P/E ratio is slightly lower than the 16 times P/E projected for its competitors COR and MCK based on their calendar year 2026 forecasts. The target also corresponds to 10 times EBITDA on the CY26 forecast for Cardinal Health.
According to InvestingPro, which offers comprehensive analysis of 1,400+ US stocks, Cardinal Health currently trades at a P/E ratio of 23.45 and shows promising growth prospects. Mizuho's EPS projections for Cardinal Health do not include the possible accretive impact from the company's pending acquisitions. Nonetheless, with an approximate 14% upside from the current stock levels, the firm is recommending an Outperform rating for investors.
The price target of $139 is based on a 15 times price-to-earnings (P/E) ratio on the forecasted calendar year 2026 earnings per share (EPS) of $9.05. This P/E ratio is slightly lower than the 16 times P/E projected for its competitors COR and MCK based on their calendar year 2026 forecasts. The target also corresponds to 10 times EBITDA on the CY26 forecast for Cardinal Health.
Mizuho's EPS projections for Cardinal Health do not include the possible accretive impact from the company's pending acquisitions. Nonetheless, with an approximate 14% upside from the current stock levels, the firm is recommending an Outperform rating for investors.
In other recent news, Cardinal Health has successfully raised $2.9 billion through the public offering of senior notes. The funds raised are intended to partially finance the company's planned acquisitions of The GI Alliance Holdings, LLC, and Advanced Diabetes Supply Group. The note offering has also led to a reduction in Cardinal Health's commitment under a previous agreement with Bank of America, N.A., for a bridge term loan facility.
In recent developments, the company has reported an increase in earnings per share (EPS) and adjusted free cash flow expectations for fiscal year 2025, despite a 4% decrease in total revenue. This positive financial performance is largely attributed to the company's operations, particularly in the Pharmaceutical and Specialty Solutions segment.
In addition, at the recent annual meeting, all 10 board nominees were elected and the executive compensation was approved. Ernst & Young LLP was ratified as the company's independent auditor for the fiscal year ending June 30, 2025.
Cardinal Health also announced plans to acquire Integrated Oncology Network for $1.1 billion. Despite challenges in the GMPD segment, the company remains optimistic about its long-term profit goals and growth strategies.
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