What's Going On With Cardinal Health Shares Today?
Portfolio Pulse from Lekha Gupta
Cardinal Health Inc (NYSE:CAH) shares dropped approximately 4% following an update on its FY24 outlook and ongoing portfolio review. The company expects FY24 adjusted EPS to be at the high end of the $6.75-$7.00 range, aligning with consensus estimates of $6.95. This expectation is due to favorable FY24 interest and shares outstanding from strong cash flow, allowing for an additional $250 million share repurchase in Q2. Cardinal Health reiterated its long-term adjusted EPS growth target of 12%-14% and confirmed a Medical Improvement Plan aiming for at least $650 million in segment profit by FY26. The company has completed a review of growth businesses within the Medical Segment and continues to review its Global Medical Products and Distribution business. Starting January 1, 2024, CAH will have a new enterprise operating and segment reporting structure, which will be included in financial reporting from Q3 FY24. Further updates will be provided on February 1, 2024.
January 09, 2024 | 3:26 pm
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NEGATIVE IMPACT
Cardinal Health shares fell after the company's FY24 outlook indicated adjusted EPS at the high end of its forecast range, thanks to strong cash flow and additional share repurchases. The company also confirmed its long-term growth targets and ongoing operational reviews.
The short-term impact on CAH shares is negative due to the market's reaction to the FY24 outlook update, which has led to a 4% drop in share price. The strong cash flow and share repurchase plan are positive indicators for the company's financial health, but the immediate market response has been bearish. The long-term growth targets and operational reviews show a commitment to improving performance, which may have a positive impact in the future.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100