Analyst: Cardinal Health Buying Spree To Boost FY17 EPS

Cardinal Health Inc CAH's recent pair of billion-dollar-plus acquisitions should boost its earnings growth in the year ending June 2017, an analyst said Tuesday.

UBS's Steven Valiquette boosted his price target about 2 percent to $97, maintaining a Buy rating on the drug distributor.

The company's shares are nearly unchanged in the past three months, trading recently at $87.76, down $0.23 on the day.

Cardinal, with a market capitalization of about $29.02 billion, on Friday said it will acquire privately held distributor Harvard Drug Group for $1.12 billion cash and debt.

Cardinal last month sealed a $1.94 billion cash deal to acquire Cordis, a maker of cardiology and endovascular products, from Johnson & Johnson JNJ. The transaction was proposed in March.

Valiquette said the two deals will boost Cardinal's fiscal 2017 earnings and he raised his estimate 4 percent to $5.78 a share.

On Friday, Cardinal said it will issue $1.5 billion of new debt related to the two acquisitions.

Moody's said the Harvard deal won't affect Cardinal's Baa2 medium-grade debt rating.

Cardinal, also Friday, forecast adjusted earnings for fiscal 2016 of $4.75 to $5.05 a share.

Valiquette continues to expect fiscal 2016 earnings of $4.95 a share, versus a Wall Street consensus of $4.91.