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Cardinal Health Inc CAH

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Reaffirming Our Narrow Moat and Negative Moat Trend on the Big Three U.S. Pharma Wholesalers

Dylan Finley, CFA Equity Analyst

Analyst Note

| Dylan Finley, CFA |

After taking a refreshed look at the U.S. pharmaceutical wholesale industry, we are reaffirming our narrow moat and negative moat trend ratings, and we have revised our fair value estimates--with AmerisourceBergen at $142 per share (previously $135), McKesson at $210 per share (previously $198), and Cardinal Health at $55 per share (previously $60). These revisions reflect slightly higher revenue growth assumptions overall, a reworking of our gross and operating margin estimates, our updated long-term U.S. tax rate estimate of 26%, and the financial impact associated with a looming multi-billion dollar opioid settlement.

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Company Profile

Business Description

Cardinal Health is a leading pharmaceutical wholesaler, engaged in the sourcing and distribution of branded, generic, and specialty pharmaceutical products to pharmacies (retail chains, independent, and mail-order), hospitals networks, and healthcare providers. Along with AmerisourceBergen and McKesson, the three compose well over 90% of the U.S. pharmaceutical wholesale industry. Cardinal Health also supplies medical-surgical products and equipment to healthcare facilities in North America, Europe, and Asia.

Contact
7000 Cardinal Place
Dublin, OH, 43017
T +1 614 757-5000
Sector Healthcare
Industry Medical Distribution
Most Recent Earnings Jun 30, 2021
Fiscal Year End Jun 30, 2022
Stock Type High Yield
Employees 47,300

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