CAH Stock Rally: How This Pharma Distributor Stacks Up Against the Broader Market

Cardinal Health (CAH) delivered solid gains during the recent trading session, climbing 1.93% to close at $202.95 per share. This move outpaced the S&P 500’s more modest 0.88% advance, though it trailed the Nasdaq’s 1.31% surge. By comparison, the Dow industrials registered a 0.38% increase. However, the prescription drug distributor’s monthly performance tells a different story—CAH has retreated 4.23% over the past month, underperforming both the Medical sector (+1.2%) and the broader market index (+2.48%).

Earnings Expectations and Consensus Projections

Analysts are gearing up for CAH’s next earnings announcement, and the numbers suggest optimism about the company’s near-term trajectory. The current consensus estimate forecasts EPS of $2.31 for the upcoming quarter, representing a robust 19.69% year-over-year increase. On the revenue side, expectations point to $64.07 billion, signaling a 15.94% expansion compared to the same quarter last year.

Looking ahead to the full fiscal year, projections become even more impressive. The Zacks Consensus Estimates anticipate annual EPS of $9.86 alongside revenue of $258.58 billion—translating to gains of 19.66% and 16.18% respectively from the prior year period.

Valuation Metrics and Industry Positioning

When examining CAH through a valuation lens, the picture becomes more nuanced. Cardinal Health currently trades at a Forward P/E ratio of 20.19, which sits above the industry average of 17.72, suggesting investors are willing to pay a premium. The PEG ratio—which factors in earnings growth expectations—stands at 1.45 for CAH, meaningfully lower than the Medical - Dental Supplies industry average of 2.36. This divergence suggests the stock may offer relative value when growth prospects are considered.

The broader Medical - Dental Supplies sector, which houses CAH, currently holds a Zacks Industry Rank of 151 out of 250+ industries tracked. This positioning places the sector in the bottom 39%, according to industry strength rankings. Research indicates that top-tier ranked industries typically outperform lagging sectors by a 2-to-1 margin.

Analyst Sentiment and Recent Revisions

Estimate revisions provide meaningful signals about shifting market expectations. Over the past month, consensus EPS estimates have moved slightly downward by 0.17%, reflecting minor adjustments in analyst outlook. Currently, Cardinal Health maintains a Zacks Rank of #3 (Hold), indicating a neutral stance on the stock’s near-term prospects.

These consensus shifts matter because they often precede meaningful price movements, making them a key metric for investors monitoring healthcare distribution plays like CAH.