Cardinal Health Targets 13%-15% EPS Growth as Specialty Momentum Builds

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Sun, September 20, 2026 at 1:01 AM GMT+3 6 min read

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Cardinal Health expects adjusted EPS to grow 13%-15% in fiscal 2027, driven mainly by operating-income growth across its business segments. The company also reiterated its longer-term 12%-14% EPS growth target and plans $1 billion in share repurchases.
Specialty services remain the primary growth engine: after expanding 25% in fiscal 2026, specialty growth is expected to approach double digits, while BioPharma Solutions is targeting $1 billion in revenue by fiscal 2028.
Cardinal Health anticipates continued growth in at-home solutions and other businesses, including contributions from recent acquisitions, while its medical-products division remains focused on recovery after mitigating much of a $450 million tariff impact.

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Cardinal Health (NYSE:CAH) CEO Jason Hollar said the company expects fiscal 2027 to extend the broad operating momentum it generated in fiscal 2026, with all five operating segments positioned for what he described as a "constructive" period.

Speaking at the Morgan Stanley Global Healthcare Conference, Hollar said the company's fiscal 2027 adjusted earnings-per-share outlook of 13% to 15% growth is expected to be driven primarily by operating-income growth across its three reporting segments and five operating businesses. Cardinal Health reiterated its longer-term EPS growth target of 12% to 14%.

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Hollar said fiscal 2026 included strong performance across both profit and cash flow, though fiscal 2027 growth is expected to occur at more normalized rates. He said below-the-line factors will include lower interest expense supported by strong cash flow, a slightly higher expected tax rate and $1 billion in planned share repurchases.

Pharmaceutical and Specialty Growth

Within Pharmaceutical and Specialty Solutions, Hollar said generic-drug volume is expected to grow slightly above the company's usual 2% to 3% range in fiscal 2027. He attributed the outlook to favorable demographics and continued loss-of-exclusivity activity, although he said growth is not expected to match fiscal 2026 levels.

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Specialty was a major contributor in fiscal 2026, when it grew 25%, aided by acquisitions and customer wins in BioPharma Solutions. For fiscal 2027 and beyond, Cardinal Health expects specialty growth closer to a double-digit rate.

Hollar said the company remains focused on three specialty platforms: oncology, urology and autoimmune care, including gastroenterology. He said the non-oncology markets remain highly fragmented, with an estimated 80% to 90% of physicians in gastroenterology and urology still unaffiliated with a management services organization, or MSO.

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The company does not believe it needs to add a fourth specialty platform at this stage, Hollar said. Instead, it plans to continue pursuing bolt-on opportunities that fit its existing platforms and culture.

Cardinal Health's BioPharma Solutions business generated more than 30% growth in fiscal 2026, Hollar said. The company previously outlined a path to grow BioPharma Solutions revenue to $1 billion by fiscal 2028 from $550 million in fiscal 2025, representing a 20% compound annual growth rate.

Customer Relationships and Specialty Alliance

Addressing the upcoming year-end renewal of Cardinal Health's distribution contract with CVS, Hollar said the relationship is "very strong." He pointed to longer-dated partnerships involving Red Oak Sourcing, the Averon Sourcing biosimilars joint venture and IQ Purchasing for over-the-counter products.

"It is an all-of-the-above type of relationship with them," Hollar said, adding that Cardinal Health believes CVS is receiving strong service.

Hollar also said integration of Solaris Health into The Specialty Alliance is progressing as planned. The company brought distribution for GI Alliance and Solaris under its umbrella during the second calendar quarter of 2026. Cardinal Health expects the year-over-year distribution benefit to continue through the fourth quarter of fiscal 2027.

He said Solaris and GI Alliance have shared opportunities in physician recruitment, payer negotiations, infusion services and ambulatory surgery centers, while also gaining access to Cardinal Health capabilities in nuclear medicine, at-home solutions and core distribution.

Policy, Biosimilars and Medical Products

On drug pricing and Inflation Reduction Act-related changes, Hollar said Cardinal Health's fee-for-service model and contractual protections have allowed it to maintain economics when product pricing changes. He said the company expects that framework to remain intact in fiscal 2027 and beyond.

For Cardinal Health's MSO operations, Hollar said drug spending accounts for roughly one-third of revenue in its larger urology and GI businesses, while office visits and procedures account for the remaining two-thirds. That diversification, he said, limits the potential effect of policy changes on the organization.

Hollar characterized biosimilar and generic loss-of-exclusivity opportunities as "a lot of singles and doubles" rather than a single outsized event. He said 2026 and 2027 should be constructive years for loss of exclusivity, with 2028 and 2029 expected to be somewhat stronger.

In Global Medical Products and Distribution, Hollar said Cardinal Health faced a $450 million tariff impact in fiscal 2026 but mitigated about two-thirds through sourcing and other operating actions. The remaining impact was effectively shared with customers, he said. The company has not implemented significant pricing related to commodity costs, though it is monitoring pressure on fuel and oil-based inputs.

At-Home and Other Businesses

Cardinal Health expects its "other" segment to deliver 15% to 18% adjusted operating-income growth in fiscal 2027. About 2 percentage points of that growth is expected to come from the Strive Medical acquisition and an anticipated small late-year contribution from AdaptHealth's diabetes business.

Hollar said the company also expects benefits from synergies tied to its earlier acquisition of Advanced Diabetes Supply Group. In addition to at-home solutions, he cited growth in nuclear medicine, including theranostics, and expansion by OptiFreight Logistics into pharmacy products.

Looking ahead, Hollar said Pharmaceutical and Specialty Solutions will remain Cardinal Health's largest investment priority, particularly specialty services. At-home solutions will remain a key area for inorganic investment, while Global Medical Products and Distribution remains in a turnaround phase but has growth potential through Cardinal Health-branded products.

About Cardinal Health (NYSE:CAH)

Cardinal Health, Inc is a healthcare services and products company that supports the pharmaceutical and medical industries. Its Pharmaceutical and Specialty Solutions segment distributes branded, generic and specialty pharmaceuticals, over-the-counter products and consumer health items to pharmacies, hospitals, health systems and other healthcare providers. The segment also provides specialty pharmaceutical services, nuclear and radiopharmaceutical products, and related support for manufacturers and providers.

Through its Global Medical Products and Distribution segment, Cardinal Health manufactures, sources and distributes medical and surgical products, including gloves, gowns, syringes, exam-room supplies and other essential equipment.

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