Cardinal Health price target raised to $265 after fiscal 2027 outlook

Cardinal Health price target is now $265 at CNBC’s Investing Club, up from $245, after the healthcare distributor issued a fiscal 2027 profit outlook that topped the analyst expectation cited by Barron’s. The club kept its hold-equivalent 2 rating, signaling that its higher target is its own portfolio view rather than a change in Cardinal Health’s guidance or Wall Street’s consensus.

Cardinal said it expects fiscal 2027 non-GAAP earnings per share of $12.40 to $12.60, representing growth of 13% to 15%. The midpoint, $12.50, is about 3.5% above the $12.08 analysts had expected, according to Barron’s. Non-GAAP earnings exclude selected items under the company’s reporting method.

For investors, the key distinction is between a company forecast and a price target. Cardinal’s outlook is management’s projection for per-share profit in the fiscal year ahead. The $265 figure is CNBC Investing Club’s estimate of what the shares could be worth, based on its assessment of the results and outlook.

Why did CNBC raise its Cardinal Health price target?

The Investing Club pointed to stronger profitability despite a revenue shortfall in Cardinal’s fiscal fourth quarter, which ended June 30. Revenue rose nearly 6% from a year earlier to $63.67 billion, CNBC reported, but fell short of the $65.03 billion LSEG consensus estimate.

Adjusted EPS, excluding the tariff-refund benefit, was $2.60, ahead of the $2.42 LSEG consensus, according to CNBC. Cardinal reported non-GAAP EPS of $2.91, including a $0.31-per-share effect from recognizing IEEPA tariff refunds. CNBC excluded that benefit when describing the quarter’s earnings beat.

The company said EPS excluding the tariff-refund recognition increased 25% year over year. It also reported $5 billion in adjusted free cash flow for fiscal 2026, while CNBC said its case for the higher target rested in part on the company’s profit and cash generation.

Cardinal’s largest business, Pharmaceutical and Specialty Solutions, generated fourth-quarter revenue of about $58.8 billion, up 6%, and segment profit of $645 million, up 21%, according to the company. It distributes branded and generic drugs, specialty medicines and consumer health products. The company attributed the profit improvement to brand and specialty products and its generics program.

Results elsewhere were less even. Global Medical Products and Distribution revenue declined 2% to $3.1 billion, while segment profit reached $150 million, primarily driven by the tariff refunds, Cardinal said. CNBC also reported that sales and segment profit in the company’s smaller Other unit missed expectations, though that unit’s margin was above Street expectations.

The higher target came with clear caveats. The quarterly sales miss shows that profit improvement did not erase pressure on the top line. And CNBC retained its hold-equivalent rating after the stock returned near record levels, saying it would wait for a better opportunity before upgrading its view.

This story draws on original reporting from CNBC.