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Cardinal Health Inc CAH

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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.

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