Cardinal Health (CAH.N) F4Q26 Quick Take: Across-the-Board Margin Improvement Drives Beat and FY27 Guide Ahead of Expectations

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11 Aug 2026 08:24:04 ET │ 13 pages

Cardinal Health (CAH.N)

F4Q26 Quick Take: Across-the-Board Margin Improvement Drives Beat

and FY27 Guide Ahead of Expectations

CITI'S TAKE

CAH closed out distributor earnings on a solid note. While revenue was a

bit light (+5.8% y/y missing our/cons. estimates by 1.9%/2.7%), this was

more than offset by margin improvement as AOI grew 30% y/y beating

our/cons. estimates by 15.6%/14.4% driving adj. EPS up 40% y/y beating

our/cons. estimates by 19%/20% (we note this included a $100M/$0.31

AOI/EPS benefit from tariff refunds; ex-refund AOI beat our/cons by

3%/2% and EPS beat by 6%/7%). CAH introduced FY27 guidance with

profitability ahead of our expectations (revenue a bit lower largely driven

by the Pharma segment). For FY27, CAH guided to non-GAAP EPS of

$12.40–$12.60 (13–15% y/y growth) beating our/cons. expectations by

4%/3% as Pharma AOI is expected to grow 8%-11% (meeting our/cons.

estimates), Other AOI is expected to grow 15%-18% (beating our/cons. by

3%), and GMPD is expected to improve by $50M (normalizing for refunds)

beating our/cons. estimates by 7%/8%.

Buy

Price (10 Aug 26 16:00)

US$237.18

Target price

US$265.00

Expected share price return

11.7%

Expected dividend yield

0.9%

Expected total return

12.6%

Market Cap

US$55,549M

Daniel GrosslightAC

Luismario Higuera

Results — 4Q revenue was a bit below expectations, driven by topline softness

across the three segments but AOI was well above expectations (largely due to tariff

refunds). Pharma revenue came in at $58,848M (+6% y/y), missing guidance of

$59,356M–$63,448M and our/cons. estimate of by (1.6%)/(2.6%), with growth

driven by brand and specialty pharmaceutical sales growth from existing customers.

Pharma AOI was $645M (1.1% margin), beating guidance of $617M–$639M and

our/cons. by 1.2%/1.7%, driven by brand and specialty products and positive

generics program performance. GMPD segment revenue came in at $3,128M ((2.2)%

y/y) missing guidance of $3,171M–$3,424M and our/cons. by (6.0%)/(3.9%), driven

by lower overall distribution volumes, partially offset by CAH branded

growth/volume recovery. GMPD segment profit of $150M ($50M ex-tariffs) beat

…