Cardinal Health, Inc. : Technical rebound is possible
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08/20/2012 | 09:45am
Opinion : Bullish above 39 USD
Target price : 43 USD
Stop loss: 38.7 USD
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NYSE
Retail - Drugs |
Cardinal Health provides complementary products and services to healthcare providers and manufacturers. The Company's services include pharmaceutical distribution, health-care product manufacturing, distribution and consulting services, drug delivery systems development, pharmaceutical packaging, automated dispensing systems manufacturing, and retail pharmacy franchising.
From a fundamental viewpoint, Cardinal Health, Inc. is undervalued in terms of enterprise value. Based on the current price, its market capitalization, minus its net debt, represents 0.14 times its revenues. This valuation is just 11.92 and 10.82 times the two next years’ earnings.
After several weeks of horizontal fluctuations within the mid-term range USD 39.12 / USD 41.48, the stock has been penalized in the last trading sessions. The USD 39.1 area could cause a positive reaction for the coming trading sessions and allow a technical rebound towards the USD 41.5 mid-term resistance and then the long-term target price is USD 42.5 in weekly data.
The trading strategy can benefit from the proximity of the strong support currently tested in order to buy the security in a good timing. The potential gain is 4.5 %. Investors might placed a stop loss order at USD 38.7 in order to avoid important losses.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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14,3x |
14,8x |
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Capitalization / Revenue
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0,16x |
0,20x |
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EV / Revenue
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0,19x |
0,22x |
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EV / EBITDA
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7,97x |
7,57x |
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Yield (DPS / Price)
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2,19% |
2,43% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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2,02% |
2,47% |
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operating laverage (Delta EBIT / Delta Sales)
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- |
- |
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Net Margin (Net Profit / Revenue)
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1,15% |
1,36% |
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ROA (Net Profit / Asset)
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6,23% |
6,23% |
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ROE (Net Profit / Equities)
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17,0% |
17,9% |
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Rate of Dividend
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31,4% |
36,0% |
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