Cardinal Health (CAH) Morgan Stanley 24th Annual Global Healthcare Conference summary

Strategic outlook and guidance

• Fiscal 2027 guidance targets 13%-15% EPS growth, above the long-term 12%-14% range, driven by continued strong operational performance across all five business segments.

• Volume growth and constructive market utilization support ongoing investments, both organic and inorganic, across business lines.

• Specialty and Pharma segments are expected to maintain above-market growth, with specialty projected for double-digit expansion and generics slightly exceeding 2%-3% volume growth.

• Share repurchases of $1 billion and strong cash flow are expected to aid EPS, with a slightly higher tax rate anticipated in 2027.

• Operating income growth will be the primary driver of results, supplemented by below-the-line items.

Business segment performance and investments

• Specialty business, now $50 billion in revenue, is prioritized for growth, especially in oncology, urology, and autoimmune platforms, leveraging MSO acquisitions and integration.

• BioPharma Solutions is on track for $1 billion revenue by fiscal 2028, with a 20% CAGR and over 30% growth in the last year.

• Discrete investments continue in nuclear (theranostics, PET), OptiFreight (expanding into pharmacy), and at-home solutions (distribution, automation, M&A).

• GMPD business offset tariff impacts through operational efficiencies and shared costs, with pricing mechanisms in place for 2027.

• The "Other" segment targets 15%-18% AOI growth in 2027, driven by at-home solutions, M&A synergies, and continued expansion in nuclear and logistics.

Customer relationships and contract renewals

• Strategic, multi-faceted relationships with major customers like CVS are emphasized, with distribution contracts up for renewal but supported by longer-term sourcing and joint ventures.

• Switching large contracts is considered onerous, reinforcing the stability of existing partnerships.