TD Cowen has increased its 12-month price objective on Cardinal Health (NYSE:CAH) to $233.00, up from $225.00, while maintaining a Buy recommendation on the healthcare services provider. With the shares quoted at $212.42, the revised target implies roughly 10% upside from current levels.
The research note cited Cardinal Health's guidance adjustment announced in mid-January - a raise to above $10.00 per share - as a central factor supporting the higher target. TD Cowen told investors it regards the company's fiscal second-quarter performance as largely de-risked in light of that guidance increase.
Market data from InvestingPro shows the stock trading close to its 52-week high of $215.48 and indicates the company may be undervalued relative to its Fair Value assessment. The same data set highlights that five analysts have recently revised upward their earnings projections for the coming period, and that consensus EPS forecasts for fiscal 2026 now sit at $10.03.
The TD Cowen analyst noted there may be expectations in the market for Cardinal Health to present an earnings range meaningfully above $10 when it reports quarterly results on February 5. Company management previously linked the mid-January guidance increase to broad-based outperformance, singling out particular strength in the firm's specialty business as a contributing factor.
Cardinal Health's shares have displayed notable momentum: InvestingPro data records a 63.4% total return over the past 12 months and a 35% gain across the last six months. TD Cowen suggested that part of the company's favorable performance could be tied to healthy trends in the generic pharmaceuticals market, a dynamic relevant given Cardinal's exposure to the retail channel.
Despite those positives, InvestingPro's figures point to relatively slim gross profit margins at 3.66%. The platform also emphasizes Cardinal Health's strong cash-generation profile, which has allowed the company to sustain dividend distributions for 44 consecutive years.
The research memo further flagged expectations for robust results from Cardinal Health's "Other" segment in the fiscal second quarter. That segment stands to benefit from easier year-over-year comparisons in its Nuclear business as the company laps a prior Moly-99 shortage, and from performance in its OptiFreight business.
Valuation measures show Cardinal trading at a price-to-earnings ratio of 31.98, which TD Cowen and InvestingPro characterize as relatively high. Nevertheless, InvestingPro assigns the company an overall financial health score of "GREAT" and provides an in-depth report with 15 additional ProTips intended to help investors assess the stock.
Other recent company-level developments corroborate the upbeat picture. Cardinal Health reported a strong start to fiscal 2026, posting an EPS of $2.55 for the first quarter versus an expectation of $2.19, and recording revenue of $64 billion compared with a forecast of $59.24 billion. Following that early-quarter performance, the company raised its fiscal 2026 earnings outlook to at least $10 per share, up from the prior range of $9.65 to $9.85.
Strategic moves were also noted: Cardinal completed its acquisition of Solaris Health and integrated the business into its multi-specialty MSO platform, The Specialty Alliance. In addition, the company's board approved a quarterly dividend of $0.5107 per share, with the payout set for January 15, 2026.
Analyst activity beyond TD Cowen included Mizuho's decision to lift its price target on Cardinal Health to $222, citing sustained strong operating trends and identifiable profit growth drivers. Together, these analyst actions and corporate results underline the breadth of positive developments across Cardinal Health's operating segments.
Contextual note - The picture painted by the analyst upgrades and the company's early fiscal-year results emphasizes a mix of operational momentum, potential valuation tension, and the effect of segment-specific tailwinds, particularly in specialty services and areas benefiting from easier year-over-year comparisons.
What to watch next - Investors will be attentive to Cardinal Health's quarterly report on February 5 and to management's commentary on whether the company will set an earnings range materially higher than $10, as market participants appear to be anticipating.