# Cardinal Health (CAH) Sector: Pharmaceutical distribution and medical products | Field | Value | |---|---| | Price | $274.29 | | Market cap | $63B | | Intrinsic value source | Analysts | | Data as of | 2026-11-10 | | Next earnings | 2027-02-04 (estimate) | Analysts: Bullish Picks: Research only Discount category: Pricey ## In short Investors pay a premium for the fast profit growth and the buybacks of Cardinal Health, and only strong growth after fiscal 2027 with a final CVS Health agreement can earn it. ## Themes and gap - Themes: Regulation and courts (regulation-legal), Weight-loss drugs (weight-loss-drugs), Tariffs and trade (trade-tariffs) - Gap type: Slow (slow) - Why: Only several more years of profit growth in drug distribution, with a final CVS Health agreement, can earn the premium. ## About Cardinal Health is one of the largest distributors of medicines in the United States. It also makes and distributes medical and laboratory products, supplies home-health products, runs nuclear pharmacies and gives freight and data services. It reports two segments, Pharmaceutical and Specialty Solutions and Global Medical Products and Distribution, and three other businesses: Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics. In Q1 of fiscal 2027 (the three months to September 30, 2026), revenue was $67.5 billion: $62.6 billion from Pharmaceutical and Specialty Solutions, $3.2 billion from Global Medical Products and Distribution and the rest from the other businesses. Revenue was $254.2 billion in fiscal 2026. Its fiscal year ends on June 30. The shares trade on the New York Stock Exchange. The head office is in Dublin, Ohio. Jason Hollar is Chief Executive Officer. ## Thesis Cardinal Health trades above its intrinsic value because investors pay for fast profit growth, large buybacks and renewed contracts with large customers. In Q1 of fiscal 2027, non-GAAP diluted EPS rose 28% to $3.26, and the company raised its fiscal 2027 guidance to $12.80 to $13.00. For the shares to earn this price, three things must be true. Pharmaceutical and Specialty Solutions must grow its profit by 10% to 12% in fiscal 2027, as guided, and keep growing after that. The binding letter of intent with CVS Health, which extends the distribution agreement to June 30, 2032, must become a final agreement on the current scope. The profit of Global Medical Products and Distribution, which fell 28% in Q1, must recover. The Q2 fiscal 2027 report, expected in early February 2027, is the next test. Slower growth in drug distribution or new opioid claims can push the shares down. ## Checkpoints - Nov 5, 2026: Q1 fiscal 2027 results and guidance. Status: Passed. Watch: Non-GAAP EPS growth and a confirmed or higher fiscal 2027 guidance pass; a guidance cut fails. Outcome: Non-GAAP diluted EPS rose 28% to $3.26, and the company raised its guidance to $12.80 to $13.00. - Feb 4, 2027 (estimate): Q2 fiscal 2027 results. Status: Pending. Watch: Pharmaceutical and Specialty Solutions profit growth of 10% or more and a confirmed guidance pass; less fails. - Q3 2027 (estimate): Final distribution agreement with CVS Health. Status: Pending. Watch: A signed agreement through June 30, 2032 on the current scope passes; a smaller scope or no agreement fails. ## Balance sheet - Cash: $5.3B - Debt: $8.8B - Net debt: $3.6B - Debt due within 12 months: $1.9B Cardinal Health funds itself mainly with payables to suppliers, bonds and cash flow. At September 30, 2026, cash and equivalents were $5,264 million, and debt was $8,815 million: $1,886 million due within a year and $6,929 million of long-term obligations. The total shareholders' deficit was $2,866 million. The company had $3.9 billion accrued for national opioid litigation settlements, and it expects most of the payments through 2038. In Q1 of fiscal 2027, operating cash flow was $1,398 million. The company paid $385 million for opioid litigation, including the sixth annual payment of $366 million under the National Opioid Settlement Agreement, bought back $500 million of shares and paid $126 million of dividends. The quarterly dividend is $0.5158 per share. The company added $1.0 billion of uncommitted revolving credit facilities in November 2026. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/721371/000072137126000042/a27q1_x093026xex991xnewsre.htm - https://www.sec.gov/Archives/edgar/data/721371/000072137126000043/cah-20260930.htm - https://www.sec.gov/Archives/edgar/data/721371/000072137126000037/a26q4_x063026xex991xnewsre.htm ## Dividends - Dividend yield: 0.7% (last 12 months, at the current price) - Paid per share, last 12 months: $2.054 (4 payments) - Current annual rate: $2.064 ($0.516 x 4 a year) - Payout ratio: 21% of the earnings of the last fiscal year (the year ended 2026-06-30) - Latest ex-dividend date: 2026-10-01, $0.516 per share - Growth over the last 5 years: 1.0% a year - Growth over the last 10 years: 2.1% a year Dividends per share by year: 2016: $1.734, 2017: $1.835, 2018: $1.89, 2019: $1.919, 2020: $1.939, 2021: $1.959, 2022: $1.979, 2023: $1.999, 2024: $1.513, 2025: $2.034. Source: company filings and market data, read on 2026-11-10. ## Recent events - 2026-11-05: Cardinal Health reported Q1 fiscal 2027 results. Revenue rose 5% to $67.5 billion, GAAP diluted EPS rose 27% to $2.38 and non-GAAP diluted EPS rose 28% to $3.26. The company raised its fiscal 2027 guidance for non-GAAP diluted EPS to $12.80 to $13.00 from $12.40 to $12.60, and it completed a $500 million share repurchase program. - 2026-10-01: Cardinal Health signed a binding letter of intent to extend its distribution agreement with CVS Health through June 30, 2032, with the current scope of distribution services. - 2026-08-11: Cardinal Health reported fiscal 2026 results. Revenue rose 14% to $254.2 billion, and non-GAAP diluted EPS rose 37% to $11.26, or 33% to $10.95 without a one-time tariff refund. The board approved $5.0 billion of new share repurchases, for a total authorization of $6.4 billion, and the company renewed its distribution contract with Kroger. - 2026-03-23: Patricia A. Hemingway Hall became Chair of the Board after Gregory B. Kenny retired. She has been a director since 2013. ## Latest news and filings - Last earnings: 2026-11-05 (8-K: https://www.sec.gov/Archives/edgar/data/721371/000072137126000042/) - Next earnings: 2027-02-04 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-11-05 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | cah-20260930 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000043/cah-20260930.htm | | 2026-11-05 | 8-K | Earnings release and Investor disclosure | | cah-20261105 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000042/cah-20261105.htm | | 2026-10-01 | 8-K | Investor disclosure | | cah-20261001 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000041/cah-20261001.htm | | 2026-08-11 | 10-K | Annual report for the period ended Jun 30, 2026 | 2026-06-30 | cah-20260630 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000038/cah-20260630.htm | | 2026-08-11 | 8-K | Earnings release and Investor disclosure | | cah-20260811 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000037/cah-20260811.htm | | 2026-08-11 | 8-K | New material agreement and End of a material agreement | | cah-20260807 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000036/cah-20260807.htm | | 2026-08-05 | 8-K | Change of directors or officers | | cah-20260804 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000026/cah-20260804.htm | | 2026-04-30 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | cah-20260331 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000018/cah-20260331.htm | | 2026-04-30 | 8-K | Earnings release and Investor disclosure | | cah-20260430 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000017/cah-20260430.htm | | 2026-03-23 | 8-K | Change of directors or officers and Investor disclosure | | cah-20260317 | https://www.sec.gov/Archives/edgar/data/721371/000072137126000013/cah-20260317.htm | Every filing on SEC EDGAR (CIK 721371): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000721371&type=&dateb=&owner=include&count=40 ## Risks - Medium: A few large customers, such as CVS Health, give a large part of revenue. The CVS Health renewal is a letter of intent until the parties sign the final agreement. - Medium: Cardinal Health had $3.9 billion accrued at September 30, 2026 for national opioid litigation settlements, with most payments through 2038. Other opioid lawsuits continue. - Medium: Changes to drug prices in the United States can reduce the fees and margins of distributors. - Low: Global Medical Products and Distribution has a low margin: segment profit was $33 million on revenue of $3.2 billion in Q1 fiscal 2027. Tariffs, freight costs and exchange rates can cut it more. - Low: Shareholders' equity is negative, a deficit of $2,866 million at September 30, 2026. Large losses or payments can reduce the room for more buybacks. ## Links - Page: https://picks.utilarium.app/company/CAH/ - History of changes: https://picks.utilarium.app/company/CAH/history/ - JSON with full history: https://picks.utilarium.app/data/company/CAH.json > Picks is a personal record of stock picks. 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