Shares of Cardinal Health (CAH) fell more than 3% in Tuesday’s trading session despite the company announcing that it expects its full-year fiscal 2024 earnings to come in at the high range of its guidance.
The outlook in question is somewhere between $6.75 to $7 a share. Meanwhile, the FactSet consensus is $6.96. This could be part of what left the market underwhelmed – the company will just barely outperform if this forecast holds true.
Narrowing the focus to just the second quarter of 2024, Cardinal Health is anticipating results from its medical segment profit to fall in line with first-quarter results, as a result of anticipated non-recurring adjustments. This comes on the heels of an accelerated $250 million share buyback program during the 2nd quarter.
The company is also reporting that it will invest heavily in segments such as Medical, At-home Solutions, and OptioFreight Logistics. The pharmaceuticals and medical products manufacturer will build a new Texas distribution center to accommodate these goals.
This decision came after a comprehensive review of key business segments in the Medical category. Cardinal Health is still set to review its Global Medical Products and Distribution process, and the future remains uncertain.
While this news was reported Monday after the market closed and initially sent shares higher in pre-market trading Tuesday, shares went the other way when the bell sounded. The stock was on pace to open at its highest price since stamping a record high of $108/share just a few weeks back.
That being said, CAH is still up nearly 12% in the past 3 months and more than 28% in the past year. The stock has been rallying in the right direction for a while – but where does this leave investors right now? Don’t worry – we’ve dug deeper through the VectorVest stock analysis software and found 3 things that will leave you with complete clarity on your next move with CAH.
CAH Has Fair Upside Potential, Safety, and Timing Right Now
The VectorVest system saves you time and stress while empowering you to win more trades. It’s a proprietary stock rating system built on 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT). Each sits on its own scale of 0.00-2.00 with 1.00 being the average.
This makes interpretation quick and easy, as you can gain clear, actionable insights at just a glance. It gets easier, though. VectorVest offers a buy, sell, or hold recommendation for any given stock at any given time based on these ratings. As for CAH, here’s what we found:
- Fair Upside Potential: The RV rating is a comparison of a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. It offers far superior insights than a simple comparison of price to value alone. CAH has a fair RV rating of 0.86, albeit a ways below the average. The stock is overvalued right now, though, with a current value of 0.86.
- Fair Safety: The RS rating assesses a stock’s risk profile. It’s calculated through an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other risk factors. CAH is a fairly safe stock as evidenced by the RS rating of 0.93, just below the average.
- Fair Timing: There’s no real meaningful price trend for CAH right now, as the fair RT rating of 0.96 is right around the average. This rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 0.92 is deemed fair and leaves CAH with a HOLD recommendation for the time being. But, we invite you to learn more about this specific opportunity or how the VectorVest system works through a free stock analysis today.
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VectorVest advocates buying safe, undervalued stocks, rising in price. CAH is falling in today’s trading session despite announcing it expects its earnings for fiscal 2024 to come in at the high end of its previously issued guidance. The stock has fair upside potential, safety, and timing.
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