- The apparent large stake from activist investor Elliott Management in Cardinal Health ( NYSE: CAH ) "could help catalyze focus on margin improvements and unlocking value in the Medical segment," according to Morgan Stanley.
- The Wall Street Journal on Monday reported that Elliott took a large position in Cardinal Health ( CAH ) and has nominated five directors to the drug wholesaler's board .
- Analyst Ricky Goldwasser noted that although the company is up 36% year-to-date, it has underperformed peers over the last five years.
- Given a "medical business unit performing well below target, a potential activist stake may not come as a surprise," he wrote. The medical unit accounted for ~10% of company profit in fiscal 2022.
- "Elliott's potential involvement could lead to increased confidence that the company and Board will evaluate the best path forward," Goldwasser added.
- Morgan Stanley has an overweight rating and a $70 price target on Cardinal Health. The stock closed at $69.97 Monday.
- Cardinal Health ( CAH ), along with McKesson ( MCK ), hit fresh 52-week highs on Monday .
For further details see:
Activist interest in Cardinal Health could unlock value, improve margins - Morgan Stanley