In the latest close session, Cardinal Health (CAH) was down 1.64% at $154.31. The stock fell short of the S&P 500, which registered a gain of 1.56% for the day. On the other hand, the Dow registered a gain of 1.29%, and the technology-centric Nasdaq increased by 2.21%. Shares of the prescription drug distributor witnessed a gain of 3.05% over the previous month, beating the performance of the Medical sector with its gain of 2.08%, and the S&P 500's gain of 0.41%.The upcoming earnings release of Cardinal Hea ...

Core Insights - McKesson (MCK) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong performance trend in the Zacks Medical - Dental Supplies industry [1] Earnings Performance - McKesson has a solid history of surpassing earnings estimates, averaging a 1.76% beat over the last two quarters [2] - In the most recent quarter, McKesson reported earnings of $8.23 per share against an expectation of $8.26, resulting in a surprise of 0.36%. In the previous quarter, it exceeded the consensus estimate of $9.81 by reporting $10.12, a surprise of 3.16% [3] Earnings Estimates and Predictions - Estimates for McKesson have been trending higher, supported by its history of earnings surprises. The stock has a positive Zacks Earnings ESP (Expected Surprise Prediction), indicating a strong likelihood of another earnings beat [6] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise, suggesting that McKesson could be among those stocks [7] Earnings ESP and Analyst Sentiment - McKesson currently has an Earnings ESP of +1.24%, indicating that analysts are optimistic about the company's earnings prospects. This positive metric, combined with a Zacks Rank of 3, suggests a potential earnings beat is on the horizon [9] - The Earnings ESP metric is crucial for predicting earnings outcomes, as a negative value can diminish its predictive power, although it does not necessarily indicate an earnings miss [9]

Group 1: Stock Performance - Cardinal Health's stock closed at $148.96, reflecting a -3.64% change from the previous day's closing price, underperforming the S&P 500's daily loss of 0.5% [1] - Over the past month, Cardinal Health's shares have appreciated by 3.58%, outperforming the Medical sector's loss of 0.7% and the S&P 500's gain of 2.74% [1] Group 2: Upcoming Earnings Disclosure - Cardinal Health is set to release its earnings report on October 30, 2025, with an expected EPS of $2.22, representing an 18.09% increase from the prior-year quarter [2] - The Zacks Consensus Estimate projects net sales of $59.05 billion, up 12.96% from the year-ago period [2] Group 3: Annual Estimates - For the annual period, the Zacks Consensus Estimates anticipate earnings of $9.41 per share and revenue of $249.31 billion, indicating increases of +14.2% and +12.01%, respectively, from the last year [3] - Recent changes to analyst estimates reflect shifting dynamics in short-term business patterns, with positive revisions indicating analysts' confidence in business performance and profit potential [3] Group 4: Valuation Metrics - Cardinal Health is currently trading at a Forward P/E ratio of 16.42, which is higher than the industry average Forward P/E of 14.68, suggesting a premium valuation [6] - The company has a PEG ratio of 1.31, compared to the Medical - Dental Supplies industry average PEG ratio of 1.65 [7] Group 5: Industry Ranking - The Medical - Dental Supplies industry has a Zacks Industry Rank of 169, placing it in the bottom 32% of all 250+ industries [7] - The Zacks Industry Rank measures the strength of industry groups by evaluating the average Zacks Rank of individual stocks within those groups [8]

Company Performance - McKesson's stock closed at $719.80, reflecting a +1.92% increase from the previous day, outperforming the S&P 500's gain of 0.85% [1] - Over the past month, McKesson shares gained 6.5%, surpassing the Medical sector's gain of 6.01% and the S&P 500's gain of 2.38% [1] Upcoming Earnings - McKesson is expected to report an EPS of $8.58, representing a 21.36% increase compared to the same quarter last year [2] - The consensus estimate for quarterly revenue is $103.79 billion, which is a 10.82% increase from the previous year [2] Full Year Projections - For the full year, earnings are projected at $37.21 per share and revenue at $407.45 billion, indicating increases of +12.59% and +13.48% respectively from the prior year [3] Analyst Estimates - Recent changes to analyst estimates for McKesson reflect near-term business trends, with positive revisions indicating analysts' confidence in the company's performance [3] - The Zacks Rank system, which incorporates estimate changes, has a strong track record of predicting stock price performance [4] Valuation Metrics - McKesson has a Forward P/E ratio of 18.98, which is above the industry average of 15 [6] - The company also has a PEG ratio of 1.4, compared to the Medical - Dental Supplies industry's average PEG ratio of 1.78 [6] Industry Context - The Medical - Dental Supplies industry, part of the Medical sector, has a Zacks Industry Rank of 163, placing it in the bottom 35% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - Pro-Dex, Inc. reported quarterly earnings of $0.36 per share, missing the Zacks Consensus Estimate of $0.47 per share, and down from $0.46 per share a year ago, representing an earnings surprise of -23.40% [1] - The company posted revenues of $17.49 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.27%, compared to year-ago revenues of $15.02 million [2] - Pro-Dex shares have lost about 0.6% since the beginning of the year, while the S&P 500 has gained 9.6% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.50 on $15.3 million in revenues, and for the current fiscal year, it is $2.38 on $70 million in revenues [7] - The Zacks Industry Rank indicates that the Medical - Dental Supplies sector is currently in the bottom 30% of over 250 Zacks industries, which may impact stock performance [8]

Core Insights - The Cooper Companies (COO) is currently more attractive to value investors compared to Merit Medical (MMSI) based on various financial metrics and rankings [1][3][7] Valuation Metrics - COO has a forward P/E ratio of 18.10, while MMSI has a forward P/E of 24.27, indicating that COO is potentially undervalued [5] - The PEG ratio for COO is 1.79, compared to MMSI's PEG ratio of 2.39, suggesting that COO has a better balance between price and expected earnings growth [5] - COO's P/B ratio is 1.77, significantly lower than MMSI's P/B of 3.51, further supporting the argument that COO is more attractively valued [6] Rankings and Grades - COO holds a Zacks Rank of 2 (Buy), while MMSI has a Zacks Rank of 3 (Hold), indicating a stronger earnings outlook for COO [3] - The Value grade for COO is B, whereas MMSI has a Value grade of C, reflecting the superior valuation metrics of COO [6]

Core Viewpoint - Investors should closely monitor DENTSPLY SIRONA Inc. (XRAY) due to significant movements in the options market, particularly the high implied volatility of the Jan 16, 2026 $2.50 Call option [1] Company Analysis - DENTSPLY is currently rated as Zacks Rank 3 (Hold) in the Medical - Dental Supplies industry, which is positioned in the bottom 24% of the Zacks Industry Rank [3] - Over the last 60 days, there has been a mixed sentiment among analysts regarding earnings estimates; two analysts have raised their estimates while five have lowered theirs, resulting in a decrease of the Zacks Consensus Estimate for the current quarter from 47 cents per share to 46 cents [3] Options Market Insights - The high implied volatility surrounding DENTSPLY shares indicates that options traders are anticipating a significant price movement, which could be linked to an upcoming event that may trigger a rally or sell-off [2][4] - Seasoned options traders often seek out options with high implied volatility to sell premium, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected by expiration [4]

Group 1: Earnings Performance - Cardinal Health reported quarterly earnings of $2.08 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, and up from $1.84 per share a year ago, representing an earnings surprise of +2.46% [1] - The company posted revenues of $60.16 billion for the quarter ended June 2025, slightly missing the Zacks Consensus Estimate by 0.84%, but up from $59.87 billion year-over-year [2] Group 2: Stock Performance and Outlook - Cardinal shares have increased by approximately 33.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.4% [3] - The current consensus EPS estimate for the upcoming quarter is $2.17 on revenues of $57.99 billion, and for the current fiscal year, it is $9.21 on revenues of $248.27 billion [7] Group 3: Industry Context - The Medical - Dental Supplies industry, to which Cardinal belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Pro-Dex, Inc., another company in the same industry, is expected to report quarterly earnings of $0.47 per share, reflecting a year-over-year change of +2.2% [9]

Industry Overview - The Zacks Medical - Dental Supplies industry is experiencing weakness due to rising U.S. tariffs on trading partners, particularly China, which are expected to impact sales through 2025 [1] - Demand for elective procedures in the U.S. is declining, affecting sales across various product lines, including CAD/CAM and imaging products [2] - The global dental industry is projected to reach $610.4 billion with a CAGR of 4.5% from 2023 to 2032, indicating long-term growth potential despite current challenges [2] Major Trends - The aging population in the U.S. is a significant driver for the dental equipment market, with 55.8 million people aged 65 and above reported in 2020 [5] - Technological innovations such as CAD/CAM systems and AI diagnostics are enhancing treatment efficacy and expanding product use [6] - There is a growing emphasis on preventive care, leading to increased consumption of preventive dental products [6] - Trends towards minimally invasive and cosmetic dentistry are expanding market segments for specialized dental consumables [7] - Emerging markets, particularly in Asia-Pacific, are experiencing faster growth rates due to rising healthcare expenditure and improved access to care [8] Economic Impact - U.S. tariffs have significantly increased costs on essential imported dental items, with tariffs ranging from 10% to over 50%, leading to higher operational costs for manufacturers and distributors [10] - The industry is gradually shifting supply chains towards domestic production to mitigate tariff exposure, while dental associations are advocating for tariff exemptions [10] Industry Performance - The Zacks Medical Dental Supplies industry has underperformed compared to the broader sector and the S&P 500, with a collective decline of 0.4% over the past year [13] - The industry is currently trading at a forward P/E of 16.05X, lower than the S&P 500's 22.7X and the sector's 18.4X [16] Company Insights - West Pharmaceutical is expected to sustain growth momentum through 2025, with projected revenues between $3.04 billion and $3.06 billion, reflecting an organic growth of 3-3.75% [22] - McKesson is experiencing strong operational momentum, with a projected revenue gain of 13.3% for fiscal 2025 [31] - Cardinal Health anticipates adjusted EPS in the range of $8.05-$8.15 for fiscal 2025, despite facing pricing pressures and inflationary impacts [37] - Cooper Companies expects revenue growth of approximately 5.7% for 2025, supported by strong demand in both CooperVision and CooperSurgical segments [43]

Core Viewpoint - Cardinal Health, Inc. is expected to report strong fourth-quarter fiscal 2025 results, driven by growth in the Pharmaceutical segment and recovery in the Medical segment, with adjusted EPS projected to increase by 10.3% year-over-year [1][2][8] Financial Performance - The company’s adjusted EPS for the last reported quarter was $2.35, exceeding the Zacks Consensus Estimate by 9.3%, with an average surprise of 10.3% over the last four quarters [1][2] - For the upcoming fourth quarter, the Zacks Consensus Estimate for revenues is $60.67 billion, reflecting a 1.3% increase from the prior year [7][8] Segment Analysis - The Pharmaceutical segment is anticipated to show robust performance, supported by strong volume trends in branded drugs and specialty physician practices, along with the expansion of the Outcomes platform [3][4] - The Medical segment is expected to continue its recovery, aided by improved global supply chain execution and stability in manufacturing, with modest sequential revenue growth anticipated [4][5] Cost Management - Operating discipline and cost-saving initiatives under the Medical Improvement Plan are expected to support margin stability, despite some offset from performance-based compensation and IT investments [5][6] Shareholder Value - Adjusted EPS is projected to benefit from segment-level profit growth, lower interest expenses, and share repurchases, with full-year adjusted EPS guidance maintained at $7.20-$7.35 [6][8] Market Performance - Cardinal Health's shares have gained 29.7% year-to-date, outperforming the Medical - Dental Supplies sector and the broader market [11][12] Valuation Metrics - The forward 12-month price-to-earnings (P/E) ratio for Cardinal Health is 16.5X, which is a premium compared to the industry average of 15.9X and its peers [16] Long-Term Initiatives - The company is investing in new distribution centers, including a facility in Fort Worth, TX, expected to enhance its distribution chain with advanced robotics and automation technologies [17][18]