Cardinal Health Shares Rise After Positive Q2 Earnings Report

In a recent analysis, Cardinal Health, Inc.'s stock gains have reflected a positive market sentiment following better-than-expected Q2 results. The company exceeded EPS estimates and generated strong sales growth excluding the impact of a contract expiration.

Date: 10-02-2025

AI Rating: 7

Stock Performance and Market Comparison
Cardinal Health, Inc. (CAH) has experienced a significant increase in its stock price, completing a year where it outperformed the broader market this year with a 20.5% rise over the past 52 weeks. However, it still lags behind the SPDR S&P Health Care Services ETF's performance, indicating a mixed competitive position in the healthcare services sector.

Revenue Growth
In the latest quarter, CAH's revenues decreased by 3.8% year-over-year to $55.3 billion largely due to a large customer contract expiration. Notably, however, revenues increased by 16% when adjusted for this interruption, surpassing street expectations. The growth in revenue from core operations suggests an adaptation to business pressures, which can be encouraging for investors.

Earnings Per Share (EPS)
Cardinal Health reported an adjusted EPS of $1.93 for the quarter, marking a 2.1% increase year-over-year and exceeding consensus estimates by 10.3%. This positive EPS growth indicates strong fundamentals and effective cost management, potentially boosting investor confidence.

Earnings Outlook
For fiscal 2025, an earnings growth forecast of 5.6% suggests that analysts are optimistic about Cardinal Health's capacity to sustain growth despite recent challenges. This sustained outlook could positively affect stock valuation as it demonstrates potential resilience.

Analyst Ratings
The consensus rating of “Strong Buy” from 15 analysts indicates a robust level of investor confidence in CAH's performance. The upgrade to a “Buy” rating by Jefferies analyst Brian Tanquilut suggests that market sentiment is increasingly bullish towards the stock, further enhancing its appeal as an investment.

Stocks: CAH