Cardinal Health, Inc.

New York Stock Exchange
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Bullish +62

Cardinal Health vs. McKesson: Which Healthcare Stock Is Better?

AI integration Company update AI-generated analysis

📈 Cardinal Health reported a 30% jump in operating income and 16% increase in gross profit for fiscal Q4 2026, driven by its Pharmaceutical and Specialty Solutions anchor.

🚀 The company's Other businesses generated 7% revenue growth and 14% profit growth, highlighting diversification beyond traditional distribution.

💊 CAH is expanding its MSO capabilities through the Specialty Alliance and integrating Solaris to strengthen relationships in specialty care.

🔬 Nuclear and Precision Health segments are benefiting from theranostics expansion and investments in automation technology.

📊 Analysts project fiscal Q1 2027 sales of $66.96 billion and EPS of $2.92, representing a 14.5% increase in earnings per share.

💰 Cardinal Health trades at a P/E multiple of 17.2, which is below the Zacks Medical sector average but above its five-year median.

📉 The stock has gained 4.7% over the past six months, outperforming McKesson's 0.1% increase despite lagging the S&P 500.

🏆 CAH holds a Zacks Value Score of A and Momentum Score of A, contrasting with McKesson's lower scores in these categories.

⚠️ Key risks for Cardinal Health include tariff uncertainty, regulatory changes, and the execution of its GMPD improvement plan.

Bullish Signals
  • Cardinal Health reported a 30% jump in operating income and 16% increase in gross profit for fiscal Q4 2026, driven by strong performance in Pharmaceutical and Specialty Solutions.
  • The company's Other businesses generated 7% revenue growth and 14% profit growth, demonstrating successful diversification beyond traditional distribution models.
  • Analysts project fiscal Q1 2027 EPS of $2.92, representing a robust 14.5% increase compared to the prior year.
  • Cardinal Health trades at a P/E multiple of 17.2, offering a moderate valuation below the sector average while maintaining strong projected earnings growth.
  • The stock has gained 4.7% over the past six months, outperforming its primary competitor McKesson during the same period.
Risk Factors
  • Cardinal Health underperformed the Zacks Medical sector's rise of 9.1% and the S&P 500's return of 17.7% over the past six months.
  • Key risks for the company include ongoing tariff uncertainty, regulatory changes, and the execution challenges associated with its GMPD improvement plan.
Full Analysis
Cardinal Health (CAH) and McKesson (MCK) are competing in U.S. pharmaceutical distribution, with CAH showing stronger recent earnings momentum despite underperforming the broader medical sector over the past six months. In fiscal Q4 2026, Cardinal Health reported a 6% revenue increase to $63.7 billion, a 16% rise in gross profit, and a significant 30% jump in operating income, driven primarily by its Pharmaceutical and Specialty Solutions segment. The company is executing a strategic shift toward a diversified, specialty-led model with growth in its Other businesses, which saw 7% revenue and 14% profit growth in the same quarter. Key initiatives include expanding MSO capabilities through the Specialty Alliance, integrating Solaris to deepen physician relationships, and leveraging theranostics expansion within Nuclear and Precision Health while investing in automation and supply-chain technology. Looking ahead to fiscal Q1 2027, analysts project CAH sales of $66.96 billion (up 4.6%) and EPS of $2.92 (up 14.5%), with stable earnings estimates over the past week. The stock trades at a P/E multiple of 17.2, offering a moderate valuation backdrop below the sector average but above its five-year median, supported by strong projected EPS growth and favorable Zacks Style Scores in Value and Momentum.