Assessing Cardinal Health (CAH) Valuation After Strong Q2 Beat And Raised 2026 Profit Guidance
Cardinal Health (CAH) is back in focus after reporting second quarter results that topped Wall Street expectations, with higher sales and net income, as well as raised 2026 profit guidance, putting fresh attention on the stock’s recent performance.
See our latest analysis for Cardinal Health.
The latest move takes Cardinal Health’s share price to $220.79, with a 1 day share price return of 2.66% and a 90 day share price return of 7.51%. Its 1 year total shareholder return of 77.13% and 5 year total shareholder return of 379.06% reflect strong compounding alongside recent earnings beats, ongoing share buybacks and a reaffirmed quarterly dividend.
If strong returns in healthcare distributors have caught your eye, this could be a good moment to widen your search with our list of 25 healthcare AI stocks.
With earnings beating expectations, profit guidance raised and the share price already up strongly, the key question now is whether Cardinal Health still trades at a reasonable price or if the market is already pricing in years of future growth.
Most Popular Narrative: 9.2% Undervalued
Cardinal Health’s most followed narrative puts fair value at about $243 per share versus the current $220.79 price, framing the stock as modestly undervalued and heavily tied to how its specialty and distribution businesses evolve.
The strong performance and continued investment in Other growth businesses such as at-Home Solutions, Nuclear and Precision Health, and OptiFreight Logistics aligns with the growing trend of outpatient and home healthcare, which is underpinning diversified revenue growth and supporting margin expansion.
Want to see what is behind that valuation gap? The narrative leans on steady revenue expansion, a slimmer cost base, and a richer earnings mix from higher margin lines. Curious which assumptions really move the needle on that projected cash flow path and future profit multiple? The full breakdown lays out the numbers behind that $243 fair value.
Result: Fair Value of $243.07 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there is still real execution risk, with regulatory and pricing pressure, as well as potential loss or expiration of major customer contracts, both capable of challenging this bullish setup.
Find out about the key risks to this Cardinal Health narrative.
Build Your Own Cardinal Health Narrative
If you are not fully sold on this view or prefer to rely on your own analysis, you can quickly build a personalised thesis using Do it your way.
A great starting point for your Cardinal Health research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
Looking for more investment ideas?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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