CAH - Embedded Expectations Analysis - 2021 01 13
Cardinal Health, Inc. (CAH:USA) currently trades near historical lows relative to UAFRS-based (Uniform) earnings, with a 14.0x Uniform P/E. At these levels, the market has expectations for profitability to remain weak, and management may have concerns about COVID-19 vaccine distribution, cost reduction efforts, and at-Home solutions growthSpecifically, management may lack confidence in their ability to sustain their at-Home solutions sales growth, and they may be concerned about the lack of aggressive cost reduction actions taken across their manufacturing facilities. In addition, they may be exaggerating the long-term potential of their nuclear business, the enhanced technological capabilities of their Pharmaceutical Distribution business, and their ability to leverage their scale and expertise. Furthermore, management may lack confidence in their ability to handle Phase II COVID-19 vaccine distribution needs, assure PPE supplies to their customers, and expand their biosimilar services and distribution. Moreover, they may have concerns about new prescription trends, their ability to meet guidance, and the outlook for elective procedures. Finally, management may be concerned about the sustainability of COVID-19 testing demand and persisting COVID-19-related costs
Cardinal Health is a healthcare services and products company providing customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices. The company's segments include: Pharmaceutical and Medical. The company's Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products in the United States. The company's Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets.
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