We're adding to our position in a stock that has gotten cheaper since earnings
We are buying 50 shares of Cardinal Health at roughly $199. Following the trade, Jim Cramer's Charitable Trust will own 525 shares of CAH, increasing its weight in the portfolio to 2.75% from 2.50%. We're picking up...
$4,200-$4,600 — Gold (GC) Where to settle in June?
An important development from the financial markets: We are buying 50 shares of Cardinal Health at roughly $199. Following the trade, Jim Cramer's Charitable Trust will own 525 shares of CAH, increasing its weight in the portfolio to 2. We're picking up some shares of Cardinal Health following last week's post-earnings decline .
This buy is consistent with what we discussed on Friday morning when we were restricted from trading the stock. While we were disappointed with a few aspects of Cardinal's quarterly report — including the revenue miss and $184 million of impairment charges for its Navista and ION reporting unit — we're buying shares because both management and the analyst community are confident in Cardinal's continued ability to grow earnings per share in the low-to-mid teens over the long term. Many analysts raised their fiscal year 2027 earnings per share estimate after the report, which was for Cardinal's fiscal 2026 third quarter.
Economic Details
The 2027 EPS consensus on FactSet increased to $11. 60 before the release. The negative price action combined with the higher earnings estimates means the stock is much cheaper Monday than it was one week ago.
As we pointed out Friday, shares are now trading at roughly 16. 5 times the next 12 months' estimates, according to FactSet. That's down from about 20 times earnings in early March when we took our stake.
With Cardinal Health shares trading at a mid-teens price-to-earnings multiple looking out one year, we find the valuation attractive. (Jim Cramer's Charitable Trust is long CAH. See here for a full list of the stocks.
Analyst Views
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Financial markets are tracking the development closely as investors assess the likely impact.
