Yahoo Finance Cardinal Health (CAH) to Open New Distribution Center in Ohio
Cardinal Health, Inc. CAH recently announced plans to open a new state-of-the-art distribution center in Walton Hills, OH, to support its medical products and distribution business in the United States.
The 249,000-square-foot facility will be more than 30% larger than its predecessor in Solon, OH and is expected to be fully operational by spring of 2025. This new center will integrate cutting-edge technology and automation, enhancing efficiency, storage capacity and the overall quality of service.
Significance of CAH’s Expansion
Per Cardinal Health, the expansion of the distribution network in Northeast Ohio reflects the company’s commitment to improving its operational capabilities and meeting the growing needs of the healthcare industry. The new facility will not only streamline workflows but also improve safety for employees, reduce delivery times and increase the storage capacity essential for handling an expanding inventory. This strategic investment is part of Cardinal Health’s broader initiative to strengthen its infrastructure, ensuring supply chain resilience and better service for healthcare providers and patients across the United States.
More on the News
Cardinal Health is strategically expanding its U.S. operations to better serve healthcare providers and patients by investing in new facilities and technology solutions. In 2023, the company opened two distribution centers in Central Ohio and a medical products replenishment center in New York, bolstering inventory levels and supply chain efficiency. The upcoming opening of the new distribution center near Boston in late 2024 will enhance its ability to handle specialized products, including those requiring refrigeration.
The new Forward Innovation Center (East) in Northeast Ohio is set to become a key hub for modern manufacturing and distribution. Walton Hills is poised to play a vital role in supporting the company's growth in the region.
Industry Prospects
Per a report in Precedence Research, the global healthcare distribution market size was worth $981 billion in 2022. It is anticipated to reach $4.3 trillion by 2032 at a CAGR of 15.93%.
The robust growth will be mainly driven by a rising incidence of chronic diseases, the growing importance of generics across the globe, a favorable R&D investment scenario and a subsequent increase in drug launches. The increasing use of technologies such as RFID and Blockchain in logistics and growing applications in track and trace solutions will drive growth further.
Price Performance
Shares of Cardinal Health have increased 8.8% so far this year compared with a 0.1% rise of the industry. The S&P 500 has witnessed a 17.5% rise in the same time frame.
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Zacks Rank & Key Picks
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space are Universal Health Services UHS, Quest Diagnostics DGX and ABM Industries ABM. While Universal Health Services carries a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Services has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Services has gained 41.1% compared with the industry's 34.8% rise so far this year.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 3.7% so far this year compared with the industry’s 10.2% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 24.1% so far this year compared with the industry’s 11.9% increase.
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