UPDATE: ISI Group Upgrades Cardinal Health to Overweight; Pricing Fears Overdone
ISI Group raised its rating on Cardinal Health (NYSE: CAH) from Market Weight to Overweight and increased its price target from $45 to $46.
ISI Group noted, "We believe that fears over pricing on the upcoming WAG and CVS contracts are overwrought by investors and overpriced in CAH shares. At ~6x EV/EBITDA, CAH offers investors ~9% FCF yield (ex one-time items) and high-single-digit EPS growth in the medium-term with downside already baked in to expectations (~3-5% hit to EPS from re-pricing pressures with cost leverage to cushion)."
Cardinal Health closed at $40.85 on Monday.
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