Morgan Stanley has raised its price target on Cardinal Health to $245.00 from $224.00 and kept an Overweight rating on the healthcare services company. The stock is trading at $210.39, roughly 0.98% below its 52-week high of $215.48, and has returned 66.74% over the past year.
InvestingPro data referenced in market reports indicates Cardinal Health appears undervalued relative to a calculated Fair Value benchmark.
Earnings guidance and analyst revisions
The analyst action follows Cardinal Health’s upward revision of its fiscal year 2026 non-GAAP diluted earnings per share guidance to at least $10.00. That new floor represents a 25-cent increase from the prior midpoint of the $9.65 to $9.85 range. Market data shows eight analysts have already revised their earnings forecasts upward, with the consensus EPS projection for fiscal 2026 now at $10.03.
Morgan Stanley specifically pointed to the company’s disclosure that specialty revenues are expected to exceed $50 billion and to grow at an approximate 16% three-year compound annual growth rate. The firm characterized that specialty trajectory as a material factor in its updated outlook.
Updated segment forecasts and valuation approach
In revising its model, Morgan Stanley increased its fiscal 2026 adjusted operating income growth forecast for Cardinal Health’s Pharmaceutical and Specialty segment to 21.4% year-over-year, up from a prior estimate of 17.5%. The bank also nudged up its projection for the company’s Other segment adjusted operating income growth to 30.9% year-over-year from 30.4%.
The new $245 price target is derived from a 20.4x multiple applied to Morgan Stanley’s calendar year 2027 EPS estimate of $12.01. By contrast, the previous valuation was a 22.0x multiple of calendar year 2026 EPS of $10.31.
Corporate developments and peer analyst moves
Cardinal Health itself confirmed the raised fiscal 2026 outlook, reiterating that the adjustment reflects strong performance across its business segments. The company also completed the acquisition of Solaris Health, folding the urology Management Services Organization into its Specialty Alliance platform.
Other sell-side firms revised their targets as well: TD Cowen increased its price target to $233 and kept a Buy rating, while Mizuho raised its target to $222 and maintained an Outperform stance, each citing the company’s improved guidance and anticipated operating trends.
Separately, Cardinal Health’s board approved a quarterly dividend of $0.5107 per share, payable on January 15, 2026, to holders of record as of January 2, 2026.
What the update signals
The combination of higher guidance, upward revisions by multiple analysts, and the company’s acquisition integration and dividend approval underpin recent positive analyst sentiment. Market measures referenced in public data sources suggest Cardinal Health may still trade below a calculated Fair Value, according to InvestingPro metrics.
Reported figures, projections, and the valuation methodology described above are those presented by the analysts and company statements; no further projections or assumptions are introduced here.