S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
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American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
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S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Stock market today: Tumbling tech stocks drag Wall Street to the finish line of another losing week
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Stock market today: Tumbling tech stocks drag Wall Street to the finish line of another losing week
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Stock market today: Tumbling tech stocks drag Wall Street to the finish line of another losing week
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold

Cardinal Health Clears Base, But Can It Maintain Uptrend?

Cardinal Health Clears Base, But Can It Maintain Uptrend? Cardinal Health Clears Base, But Can It Maintain Uptrend?

Key Points

  • Medical products distributor Cardinal Health cleared a cup-with-handle buy point Wednesday.
  • Cardinal reports its fiscal first quarter on November 4, before the opening bell. Wall Street expects the company to earn $0.97 per share on revenue of $48.53 billion.
  • Cardinal’s three-year earnings growth rate is -3%, and its three-year revenue growth rate is 7%. 
  • 5 stocks we like better than Cardinal Health

Cardinal Health NYSE: CAH, which distributes branded and generic pharmaceutical products, and also manufactures, sources, and distributes products for medical, surgical, and laboratory uses, cleared a cup-with-handle buy point Wednesday.

That’s a pretty impressive feat, considering the stock posted gains even as the broader market declined. 

Does that mean it’s time to buy?

The current base builds upon two earlier consolidations that began in April 2021. The stock broke out of the first consolidation a full year later, as the stock missed out on the 2021 broad market rally altogether. 

Cardinal cleared its second consolidation in mid-August, but within a few weeks was correcting again as the broader market struggled. 

The stock bounced decisively off its 10-day moving average Tuesday, and added to those gains in Wednesday’s session, closing at $70.80, up $0.14, or 0.20%. That was 2.4% above its 10-day line. 

Cardinal is one of those relatively known S&P 500 components, checking in at No. 316, with a market capitalization of $18.55 billion. 

Earnings and revenue data compiled by MarketBeat show that Cardinal beat top-line views in the past five quarters. It’s missed earnings views in four of the past five. The company has a long history of profitability, albeit growing at relatively low rates, and even declining at times.

The company’s reporting cycle is currently in fiscal 2023; in fiscal 2022, earnings declined 9%, to $5.06 per share.

Cardinal reports its fiscal first quarter on November 4, before the opening bell. Wall Street expects the company to earn $0.97 per share on revenue of $48.53 billion. That would be a decrease on the bottom line but an increase on the top line. 

Cardinal’s three-year earnings growth rate is -3%, and its three-year revenue growth rate is just 7%. 

Analysts expect that trend to reverse, with profit growing 3% to $5.23 per share in fiscal 2023, with another 18% growth the following year. 

Data on institutional investors compiled by MarketBeat reveal more institutional buying than selling over the past 12 months. The largest institutional holders are asset management giants State Street and T. Rowe Price. 

Despite a chart that shows a series of consolidations, Cardinal has posted a strong series of gains over the following rolling time frames:

  • 1 month: +6.42%
  • 3 months: +29.99%
  • Year-to-date: +40.11%
  • 1 Year: +52.49%

One thing that Cardinal has going for it: It’s part of an industry that tilts toward being defensive, as pharmaceuticals and medical supplies are always necessary. 
Cardinal Health Clears Base, But Can It Maintain Uptrend?

For the same reason, two of its peers in the medical wholesale sub-industry are also showing good price strength, relative to the wider market.


McKesson NYSE: MCK and AmerisourceBergen NYSE: ABC are outperforming the vast majority of other U.S.-listed stocks. Both companies boast continued sales and earnings growth in recent quarters. 

McKesson’s three-year earnings growth rate is a solid 23%, while its sales growth rate during that time is 7%.

The company, which distributes specialty healthcare products and medical supplies to pharmacies and hospitals, reports its second quarter on November 1. Analysts expect it to earn $6.13 per share on revenue of $69.13 billion. That would be a decrease of $0.02 per share on the bottom line but an increase on the top line. 

AmerisourceBergen has also shown steady sales and earnings increases. It’s grown earnings by 16% in the past three years, and revenue by 10%. 

The Pennsylvania-based company distributes generic drugs, over-the-counter healthcare products, and home healthcare supplies. It reports its fiscal fourth quarter on November 3, with Wall Street eyeing net income of $2.58 a share on revenue of $60.80 billion. 

MarketBeat earnings data for AmerisourceBergen show that the company topped sales and earnings expectations in the past two quarters. 

With all these companies reporting earnings in the next few weeks, it may be wise to avoid buying until results are delivered. Even if a company tops views, something in the forecast could scare investors, even temporarily, and send the stock lower. These days, with fears about inflation and a recession, there’s plenty of reason to be cautious. If a stock rockets higher after earnings, you’ll have plenty of time to jump in.

Should you invest $1,000 in Cardinal Health right now?

Before you consider Cardinal Health, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Cardinal Health wasn't on the list.

While Cardinal Health currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Cardinal Health (CAH)
4.2848 of 5 stars
$108.19+2.1%1.85%42.59Moderate Buy$103.07
McKesson (MCK)
4.7571 of 5 stars
$524.83+1.2%0.47%23.78Moderate Buy$533.50
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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