Cardinal Health Earnings: Ends Fiscal 2023, Strong Results From GLP-1 Frenzy, Strong Generics Trend

Narrow-moat Cardinal Health delivered strong fourth-quarter results and ended fiscal-year 2023 with better-than-expected numbers. Total sales during the quarter were up 13.5% year over year as solid distribution business continues to carry the company’s top line. On a favorable backdrop of healthy prescription trends, management updated fiscal 2024 guidance that it provided in June and raised sales growth expectations for its pharmaceutical segment to 10%-12% from a previous 10%. After updating our near-term assumptions as well as adjusting for the time value of money, lowered share count, and model roll, we raise our fair value estimate to $85 from $69.