Cardinal Health Upgraded - Analyst Blog

We have recently upgraded Cardinal Health Inc. (CAH) to “Outperform" with a target price of $37 based on approximately 15.7x our fiscal 2011 EPS estimate of $2.36.
 
Cardinal Health reported second quarter fiscal 2010 earnings per share of 57 cents, beating the Zacks Consensus Estimate of 46 cents and the year-ago earnings of 51 cents. Total sales increased 3% year over year to $24.9 billion, fueled by growth across all business segments.
 
Pharmaceutical segment revenues increased 3% year over year to $22.7 billion. Growth was primarily fueled by higher sales to existing pharmaceutical distribution customers. Sales to bulk customers declined 1% year over year to $11.0 billion. Sales to non-bulk customers increased 7% year over year to $11.7 billion.
 
Medical segment revenues increased 9% year over year to $2.2 billion. Growth can be primarily attributed to higher sales to existing customers.
 
Gross and operating margins remained unchanged at 3.8% and 1.4%, respectively.
 
Cardinal Health recently spun off its non-core business, Clinical and Medical Products, to form a new subsidiary, CareFusion Corporation (CFN). This helped the company to unlock the value of the asset tied in CareFusion and concentrate more on its core Healthcare Supply Chain business.
 
Cardinal Health is one of the largest global health care companies that help pharmacies, hospitals and ambulatory care sites to focus on low-cost patient care. The company is also a leading manufacturer of medical and surgical products.
Read the full analyst report on "CAH"
Read the full analyst report on "CFN"
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