CNBC commentator Jim Cramer compared the share performance of Cardinal Health (NYSE:CAH) and Danaher Corporation (NYSE:DHR), arguing that Cardinal Health has held up better. In his view, the recent pullback in Cardinal Health shares may have been driven by a market rotation into AI- and data center-linked stocks rather than any deterioration in the company’s underlying business.
Cardinal Health shares are up more than 10% year to date, although they have fallen more than 8% since early September. Speaking on September 15, Cramer said investors had been selling healthcare names such as Medtronic, Thermo and Danaher to free up cash for data center-related trades during a strong market rotation. He said Cardinal Health’s decline in that context looked “stupid,” given what he described as a strong quarter.
In results reported in August for its fiscal fourth quarter of 2026, Cardinal Health posted earnings per share of $2.91 and issued full-year 2027 EPS guidance of $12.40 to $12.60. According to the source, those figures topped analyst expectations of $2.91 and $12.04, respectively. Demand for branded and specialty drugs helped lift revenue in the company’s pharmaceutical business by 6% year on year to $55.4 billion.
At the same time, Cardinal Health’s total Q4 revenue came in at $63.67 billion, below the analyst estimate of $65.03 billion. Profit in the pharma segment rose 21% to $645 million. The article said potential headwinds include drug-pricing pressure tied to the Inflation Reduction Act and EPS normalization after fourth-quarter results were boosted by tariff refunds.
Management has also warned investors to expect more normalized growth ahead. Speaking at the Morgan Stanley 24th Annual Global Healthcare Conference, CEO Jason Hollar said the company’s 25% growth in specialty was supported by both M&A activity and new customer wins, but added that those factors are likely to contribute at a lower rate going forward.
Danaher Corporation shares, by contrast, have had a tougher year, falling more than 7% year to date, according to the source. While its second-quarter earnings per share beat analyst estimates, the company also deferred $100 million in revenue from Q2 and Q3 into fiscal 2027 and cut the high end of its full-year revenue growth outlook to 4% from 6%. With biotech investors focused on a recovery in spending, that was seen as a disappointment on a key metric.
On valuation, Danaher trades at a higher forward P/E of 22.47, versus 18.48 for Cardinal Health. Hedge fund ownership is also higher for Danaher, with 108 funds holding the stock in Q2 compared with 63 for CAH. Short interest as a percentage of float, however, is higher for Cardinal Health at 3.34%, versus 1.54% for Danaher.
