Cardinal Health stock hits all-time high at 166.33 USD

Cardinal Health (CAH) stock achieved an all-time high of $166.33, marking a 69.2% gain over the past year, following the company's upward revision of its FY24 adjusted EPS forecast to $8.15-$8.20 and robust preliminary FY26 guidance of $9.10-$9.30. This strong performance, which includes a long-term adjusted EPS CAGR target of 12-14% through FY28, has prompted firms like Jefferies and UBS to raise price targets. The company further solidified its outlook with strategic investments in Biopharma Solutions, an increase in baseline share repurchases to at least $750 million annually, and a target of generating at least $10 billion in adjusted free cash flow over the next three years, underscoring its operational strength and investor confidence.

Analysis

Cardinal Health (NYSE:CAH) has demonstrated significant fundamental and market strength, culminating in its stock reaching an all-time high of $166.33 after a 69.2% increase over the past year. This performance is underpinned by tangible improvements in the company's financial outlook. Management raised its full-year adjusted EPS forecast to $8.15-$8.20, surpassing the analyst consensus of $8.14. Furthermore, the company has provided a robust long-term vision, including preliminary fiscal 2026 adjusted EPS guidance of $9.10-$9.30, which implies 13% growth at the midpoint, and a long-term target of 12% to 14% compound annual EPS growth through fiscal 2028. This positive guidance is supported by strategic capital allocation, including an increased baseline for share repurchases to at least $750 million annually and a goal to generate at least $10 billion in adjusted free cash flow over the next three years. The bullish sentiment is echoed by the analyst community, with both Jefferies and UBS raising their price targets to $190 and $185, respectively, citing the company's defensive characteristics and growth drivers. The company's market position is further validated by a 43-year history of dividend payments and a "GREAT" financial health score from InvestingPro.

Key Decisions for Investors

• Given the raised EPS guidance for both the current fiscal year and FY26, alongside a long-term 12-14% EPS CAGR target, investors may find fundamental support for maintaining or adding to long positions.
• Investors should monitor the company's execution towards its goal of generating at least $10 billion in adjusted free cash flow over the next three years, as this is a key pillar supporting the enhanced $750 million annual share repurchase program.
• While the stock is at an all-time high, new analyst price targets from Jefferies ($190) and UBS ($185) suggest continued upside potential, making it prudent to assess valuation against these recently upgraded expectations.
• Portfolio managers seeking defensive exposure could consider Cardinal Health's profile, which combines a strong financial health score and a 43-year dividend history with clear growth drivers identified by analysts.