Cardinal Health (CAH) is a Top-Ranked Value Stock: Should You Buy?

Zacks Investment Research highlights Cardinal Health (CAH) as a stock to watch, noting its Zacks Rank of #3 (Hold) and a VGM Score of B. The company's Value Style Score of B is supported by a forward P/E ratio of 19.82, and analysts have increased the fiscal year 2025 earnings estimate by $0.20 to $8.14 per share based on upward revisions from eight analysts in the last 60 days; the company also has an average earnings surprise of 10.3%.

Analysis

Cardinal Health (CAH), a global distributor of healthcare services and products, currently holds a Zacks Rank #3 (Hold), suggesting a neutral outlook based on this proprietary model. Despite the Hold rating, the company exhibits positive underlying metrics, including a VGM (Value, Growth, Momentum) Score of B and a specific Value Style Score of B, supported by an attractive forward P/E ratio of 19.82. This indicates potential for value investors. Furthermore, sentiment around CAH's earnings outlook has improved, with eight analysts revising their fiscal 2025 earnings estimates upwards over the last 60 days. Consequently, the Zacks Consensus Estimate for fiscal 2025 has increased by $0.20 to $8.14 per share. Cardinal Health also demonstrates a consistent ability to outperform expectations, evidenced by an average earnings surprise of 10.3%. While the #3 Rank warrants caution, the combination of positive Style Scores and upward earnings revisions suggests that CAH possesses fundamental strengths that could appeal to investors looking for value and improving earnings trends.

Key Decisions for Investors

• Investors should consider Cardinal Health's B-rated Value and VGM Style Scores, which, according to Zacks methodology, can signal upside potential even for stocks with a #3 (Hold) rank.
• The recent upward revision in FY2025 earnings estimates to $8.14 per share, driven by eight analysts, and a consistent positive earnings surprise of 10.3% warrant monitoring as potential catalysts for the stock.
• Value-oriented investors might find CAH's forward P/E ratio of 19.82 particularly noteworthy, suggesting the stock could be attractively priced relative to its earnings outlook despite its neutral overall rating.