Cardinal Health initiated with bearish view at Wells Fargo, here’s why

Wells Fargo analyst Stephen Baxter initiated coverage of Cardinal Health with an Underweight rating and $96 price target. While the company’s business quality and execution appear to be improving, Cardinal remains a structurally lower-growth company versus peers, the analyst tells investors in a research note. The firm says the emerging disintermediation threat from Optum puts the stock’s multiple expansion at risk. The company’s contract with Optum is up for renewal in June 2024 and Optum appears to be preparing to handle at least some specialty distribution itself, the analyst tells investors in a research note.