Evercore ISI lifts Cardinal Health stock price target to $175

Evercore ISI raised its price target on Cardinal Health (CAH) to $175 from $165, maintaining an Outperform rating ahead of the company's Investor Day on June 12, where Cardinal Health is expected to reaffirm its 12-14% EPS CAGR. Analysts anticipate a potential increase in the Pharma segment's annual operating income CAGR, while Citi analyst Daniel Grosslight raised the price target to $157 from $140, maintaining a Neutral rating, following the company’s strong performance in various segments. Cardinal Health is expected to announce its fiscal year 2026 EPS guidance of approximately $9.05 to $9.25, reflecting a 12-14% growth from the fiscal year 2025 midpoint guidance.

Analysis

Evercore ISI has increased its price target for Cardinal Health (NYSE:CAH) to $175 from $165, reiterating an Outperform rating, in anticipation of the company's Investor Day on June 12. This positive outlook is supported by Cardinal Health's impressive 58% stock return over the past year and its current trading level near its 52-week high of $156.44. The company is expected to reaffirm its earnings per share (EPS) compound annual growth rate (CAGR) of 12-14% and is projected to announce fiscal year 2026 EPS guidance between $9.05 and $9.25, a range that may prove favorable compared to the current consensus estimate of $9.09. This growth trajectory is underpinned by strong performance in its Pharmaceutical segment, which recently saw a 16 basis point year-over-year margin expansion driven by high-margin Biopharma and Managed Services Organization solutions, and is anticipated to see an increased annual operating income CAGR. Cardinal Health recently surpassed Q1 2025 EPS expectations at $2.35 (versus $2.17 forecasted) and raised its full-year EPS guidance by $0.18 at the midpoint. Despite a slight revenue miss in Q1, the company’s P/E ratio of 24.2, coupled with 43 consecutive years of dividend payments and a recent dividend increase to $0.5107 per share, highlights solid financial fundamentals, although analysts note that other segments' growth may be tempered by an unpredictable tariff environment. Citi also recognized the company's strong performance, raising its price target to $157 while maintaining a Neutral rating.

Key Decisions for Investors

• Investors may consider the positive momentum and analyst upgrades as supportive for existing or new positions, particularly with the upcoming Investor Day potentially acting as a catalyst.
• Close attention should be paid to the June 12 Investor Day for detailed updates on the growth strategy, especially confirmation of the Pharma segment's operating income CAGR and management's outlook on tariff impacts.
• Given the stock is trading near its 52-week high and one analyst maintains a Neutral rating despite a price target increase, investors should evaluate their entry points and risk tolerance, balancing the strong growth narrative against current valuation levels.