Cardinal Health Faces Earnings Decline Amid Market Gains

A recent report indicates that Cardinal Health is expected to post lower earnings and revenue, highlighting a year-over-year decline in performance. Despite a strong industry ranking, the stock's undervalued status may not be enough to offset the anticipated downturn in earnings.

Date: 10-09-2024

AI Rating: 4

The report indicates that Cardinal Health (CAH) is projected to report earnings of $1.63 per share, reflecting a year-over-year decline of 5.78%. This potential decrease in earnings may lead to a negative market perception, impacting stock prices adversely.

Furthermore, the Zacks Consensus Estimate for revenue is predicting net sales of $51.24 billion, down 6.43% compared to the previous year. This suggests a concerning trend in revenue growth, which could further stress investors.

For the entire year, the report suggests that earnings are expected to be $7.60 per share with a revenue forecast of $215.77 billion, indicating a change of +0.93% and -4.94%, respectively. The negative revenue outlook is particularly alarming and could result in stock price adjustments.

The Forward P/E ratio of Cardinal Health is currently at 14.7, which reveals that the stock is trading at a discount compared to the industry average of 18.18. This discrepancy may attract value investors but does not mitigate the potential negative earnings revisions that could shape market sentiment.

The company maintains a Zacks Rank of #3 (Hold), indicating a neutral sentiment. While the recent consensus EPS projection has increased by 0.71%, the overall outlook remains clouded by anticipated declines in earnings and revenue, which could pressure the stock price.

Additionally, Cardinal Health operates in the Medical - Dental Supplies industry, ranked at 205 out of 250+ industries, placing it in the bottom 19%. This ranking may signal underlying challenges impacting investor confidence.

Stocks: CAH