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Cardinal Health (CAH), HHS Partner to Offer Pandemic Support

Cardinal Health Inc CAH was recently awarded a $57.8-MILLION contract to offer critical pandemic support throughout the United States in collaboration with the U.S. government. This, in turn, will help healthcare providers and first responders receive the much-needed critical products as quickly, efficiently and safely as possible to act on the ongoing COVID-19 emergencies with immediacy.

This collaboration should boost the company’s Medical segment.

More on the News

The contract includes options for the storage and distribution of 80,000 pallets of personal protective equipment (PPE) to aid the Strategic National Stockpile (SNS), which is part of the Office of the Assistant Secretary for Preparedness and Response within HHS. If exercised by the U.S. Department of Health and Human Services (HHS),  the contract could reach $91.6 million

On the back of its extensive distribution network, Cardinal Health will be well-equipped to offer a rapid deployment and delivery of SNS product across the United States and its territories, per the U.S. government directive. Therefore, the company can urgently cater to critical PPE needs in response to the coronavirus pandemic as well as other national or localized public health crises.

PPE product within the SNS will be stored across U.S. Cardinal Health medical facilities, which comprise inventory from multiple manufacturers/vendors under contract with the U.S. Government. It is offered to numerous sources and care facilities.

Recent Developments

In April 2021, Cardinal Health Specialty Solutions introduced Cardinal Health Navista Tech Solutions (TS), which is an advanced suite of technology solutions. The latest launch will enable community oncologists to boost patient outcomes and lower their treatment costs while they shift to value-based care.

In March, the company inked a deal to divest its Cordis business to Hellman & Friedman (H&F) for an amount of around $1 billion. Notably, the transaction is anticipated to be completed in the first half of fiscal 2022, subject to regulatory clearances and mandatory closing conditions.

Industry Prospects

Per a Global Market Insights report, the critical care devices market size surpassed $32.2 billion and is anticipated to witness a 2.8% CAGR from 2020 to 2026. Hence this development is well-timed for Cardinal Health.

Price Performance

Shares of this currently Zacks Rank #3 (Hold) company have gained 28.1% compared with the industry’s rally of 22.5% in the past six months.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Intuitive Surgical ISRG, The Cooper Companies COO and Veeva Systems VEEV. While Veeva sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy), presently. You can see the complete list of today’s Zacks #1 Rank stocks here

Intuitive Surgical has a projected long-term earnings growth rate of 8.5%.

The Cooper Companies has a projected long-term earnings growth rate of 11%.

Veeva has an estimated long-term earnings growth rate of 14.5%.

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