Leerink Partners Raises Price Target on Cardinal Health (CAH) Following Conference Call

Leerink Partners reiterated an Outperform rating on Cardinal Health (NYSE: CAH), and raised the price target to $105.00 (from $100.00), following the company's 1Q16 earnings conference call. The strong 49bp increase in pharmaceutical segment operating margin (to 2.61%) was driven by generic strength. F2016 pharmaceutical segment revenue is now expected to be in the mid to high teens and core organic growth appears strong and we believe brand price increases will remain resilient.

Analyst David Larsen commented, "We remain positive on CAH following the company’s F1Q:16 earnings call. The F1Q:16 upside represents a strong start to the year. Following several recent acquisitions (Metro Medical, The Harvard Drug Group, NaviHealth, and Cordis), we believe CAH has a strong platform for growth and synergy capture over the next several years. We also believe CAH has done a good job of winning new business and it is seeing strong growth from its existing customers as well (e.g., CVS). While a lower tax rate (32.9%A vs. 36.5%E) was called out an $0.08 benefit, the full year tax rate is still expected to be between 35.5% and 37% (in-line with the original guidance). We are increasing our EPS estimates on stronger revenue growth assumptions and a more favorable margin expansion outlook. Maintain OP."

For an analyst ratings summary and ratings history on Cardinal Health click here. For more ratings news on Cardinal Health click here.

Shares of Cardinal Health closed at $86.37 yesterday.

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