Company Reports

McKesson and Cardinal Health announced an agreement to extend their partnership with CVS through June 2032. McKesson serves CVS mail-order and specialty pharmacies, and Cardinal serves CVS retail pharmacies. Shares for both firms are up a mid-single-digit percentage.

Cardinal Health delivered revenue and adjusted EPS growth of 6% and 40%, respectively, during the fourth fiscal quarter. Management guided to 4% revenue and 14% adjusted EPS growth, at midpoint for fiscal 2027. Shares are flat on results.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $230 billion in US drug distribution sales in fiscal 2026, Cardinal supplies roughly one-fourth of the overall market. Its two closest competitors are Cencora and McKesson, and together they operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2025, Cardinal supplies roughly one-fourth of the overall market. Its two closest competitors are Cencora and McKesson, and together they operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Cardinal Health delivered 11% and 35% revenue and adjusted EPS growth, respectively, during the third fiscal quarter. Revenue came in slightly below FactSet consensus, and shares traded down 7% intraday April 30.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2025, Cardinal supplies roughly one-fourth of the overall market. Its two closest competitors are Cencora and McKesson, and together they operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Cardinal Health delivered a 19% and 37% revenue and adjusted EPS growth, respectively, during the second fiscal quarter. Both figures landed ahead of FactSet estimates. Management raised EPS outlook by 5% at midpoint. Shares are up about 10% as we write.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2025, the firm supplies roughly one-fourth of the overall market. Its two closest competitors are Cencora and McKesson, and together they operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Cardinal Health delivered 22.4% revenue growth and 36.1% adjusted EPS growth during its first fiscal quarter. Both figures came well ahead of consensus estimates and led to a full-year guidance increase. The market reacted positively, and shares are up over 13% as we write.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2025, the firm supplies roughly one-fourth of the overall market. Its two close competitors are Cencora and McKesson, and together, the three operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Cardinal Health reported fourth-quarter results on Aug. 12 with flat revenue growth (or 21% excluding Optum contract expiration impacts) and 13% adjusted EPS growth. EPS guidance for fiscal 2026 was raised to $9.40 at the midpoint, up 2% from $9.20 provided during the June investor day.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2025, the firm supplies roughly one fourth of the overall market. Its two close competitors are Cencora and McKesson, and together, the three operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Narrow-moat Cardinal Health discussed base business stability, growing importance of specialty assets, and favorable long-term targets during its 2025 investor day. Key notable business highlights included the launch of Specialty Alliance, a multispecialty managed services organization that combines recently acquired MSO assets and new investments behind at-home solutions and nuclear and precision health solutions to drive Cardinal’s small but higher-margin business units. This all wrapped up to some nice numbers for the rest of fiscal 2025 as well as a stronger-than-expected long-term outlook. After inching up our 2026 revenue and EPS assumptions as well as lifting our stage II growth rates by 50 basis points to reflect a stronger distribution market, driven by strong momentum in GLP-1s (diabetes and weight-loss) and specialty uptake, we raise our fair value estimate to $145 per share from $125.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2024, the firm supplies roughly one fourth of the overall market. Its two close competitors are Cencora and McKesson, and together, the three operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Narrow-moat Cardinal Health reported solid third-quarter earnings that came in a touch higher than our expectations. Total sales of $54.9 billion were flat year over year, but up 19% when adjusted for the Optum contract loss. Prescription demand and utilization trends remain resilient despite challenging macro conditions, and the firm also touted its operational excellence. GLP-1s (diabetes and weight-loss) continue to play a key role and contributed to over one third of growth. Solid performance also flowed downward, with all three segments achieving double-digit profit growth and margin expansion on both annual and sequential bases. On mergers and acquisitions, the recent acquisitions of ION and GIA lifted the bottom line, and we are pleased to see Cardinal’s strategic investments in higher-margin areas paying off. Cardinal raised full-year earnings per share guidance to $0.18 at the midpoint, or about 2.2%. This is the third time management raised guidance during the fiscal year, and we are impressed with strong momentum with no signs of slowing. After raising our near-term assumptions and giving Cardinal a bit more credit on margin expansion, we raised our fair value estimate to $125 per share from $116.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2024, the firm supplies roughly one fourth of the overall market. Its two close competitors are Cencora and McKesson. Together, the three operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Narrow-moat Cardinal Health reported second-quarter results that came in slightly ahead of our expectations. Total sales of $55.3 billion were down 3.8% year on year but up roughly 16% excluding the loss of OptumRx revenue impact. Solid prescription trends across branded and generic pharmaceuticals coupled with drug inflation provided nice tailwinds to the top line. Specialty solutions, recently bolstered by acquisitions of Integrated Oncology Network (closed December) and GI Alliance (closed Jan. 30), also contributed. Profits held up well, too, as Cardinal is staying on track to deliver the best distribution segment margin it has seen over the past three years. While we attribute some of this to loss the of Optum since the customer had weighed down Cardinal’s profits with its pricing power, we also think solid cost management and greater efficiency played a part. Management raised full-year guidance on the backdrop of these positive results and the inclusion of contributions from recent acquisitions. Pharmaceutical segment profit is now expected to grow 11% at the midpoint, up from the previous 5%, and the EPS target range was raised $0.10 at the midpoint to land between $7.85 and $8.00. After adjusting our near-term view and accounting for recent cash flows, we are raising our fair value estimate to $116 per share from $107.

Cardinal Health is one of three leading domestic wholesalers of branded, generic, and specialty pharmaceutical products. With over $200 billion in annual US drug distribution sales in fiscal 2024, the firm supplies roughly one fourth of the overall market. Its two close competitors are Cencora and McKesson. Together, the three operate as a pharmaceutical wholesale and distribution oligopoly, supplying over 90% of the US market.

Narrow-moat Cardinal Health announced that it entered into agreements to complete two transactions. First, Cardinal will acquire a 71% majority stake in GI Alliance for $2.8 billion with a call right to purchase up to 100% of the remaining equity beginning on the third anniversary of closing. GIA is one of the leading gastroenterology management services organizations, or MSOs, in the US and supports over 700 independent gastroenterologists across 345 practice locations. Second, Cardinal is to acquire the Advanced Diabetes Supply Group for $1.1 billion. ADSG is a leading diabetic medical supplies provider that serves close to half a million patients annually. We don’t anticipate any regulatory challenges with the deals, and management expects them to close in early 2025. At first glance, we are maintaining our fair value estimate of $107 per share and our Standard Capital Allocation Rating.

Narrow-moat Cardinal Health started fiscal 2025 on strong footing, reporting healthy first-quarter numbers above our expectations. Total sales were down 5% year over year but up 15% after excluding the impact of the lost Optum Rx contract, with GLP-1 metabolic drugs contributing 5 percentage points of growth. Cardinal also delivered solid margin expansion, with adjusted EBIT and earnings per share growing 12% and 9%, respectively, despite the major customer loss. We think the firm has effectively managed the challenges of this transition and started to leverage a more simplified business. Against the backdrop of solid results, Cardinal inched up sales and profit guidance for the distribution segment and also its EPS outlook to $7.82 at the midpoint, up $0.20 from previous expectations. After bumping up our near-term estimates, we have raised our fair value estimate to $107 per share from $102.