Cardinal Health rated Buy on strong EPS growth and specialty healthcare expansion despite margin risks.

Cardinal Health received a Buy rating due to its defensive business model, strong adjusted EPS growth of 35% in Q3FY26, and strategic moves into specialty healthcare. The company reported 11% revenue growth, though GAAP earnings were pressured by higher costs and special items. Its valuation is premium with a Forward P/E of 21.64x, supported by improving profitability and cash flow. However, future gains depend on maintaining margin improvements amid risks like legal liabilities from opioid litigation, requiring close monitoring of operational efficiency and cash flow management.