Wall Street Analysts Think Cardinal (CAH) Is a Good Investment: Is It?

Group 1 - Cardinal Health (CAH) has an average brokerage recommendation (ABR) of 1.67, indicating a consensus between Strong Buy and Buy, with 66.7% of recommendations being Strong Buy from 15 brokerage firms [2][4] - The ABR should not be the sole basis for investment decisions, as studies suggest brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [4][9] - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, issuing five "Strong Buy" recommendations for every "Strong Sell," which may mislead investors [5][9] Group 2 - The Zacks Rank, a proprietary stock rating tool, is a reliable indicator of near-term price performance, classifying stocks from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7][10] - The Zacks Rank is based on earnings estimate revisions, which are strongly correlated with near-term stock price movements, providing a more timely indication of future price trends compared to the ABR [10][11] - For Cardinal Health, the Zacks Consensus Estimate for the current year has increased by 0.2% to $7.84, reflecting analysts' growing optimism and resulting in a Zacks Rank 2 (Buy) [12][13]