Cardinal Health (NYSE:CAH) Trading Cheap on EV/EBITDA

Cardinal Health (NYSE:CAH) is considered very cheap by UBS (NYSE:UBS) when taking into account EV/EBITDA, according to UBS (NYSE:UBS).

UBS noted, "Three recent M&A deals have now created a $0.18-$0.20 or 6-7% spread between CAH’s reported GAAP and cash EPS related to deal amortization. Given the recent investor enthusiasm for stocks in our universe that were catalyzed by M&A-related shifts from GAAP to cash EPS (Express Scripps (Nasdaq:ESRX) / Medco Health (NYSE:MHS) / Catalyst Health (Nasdaq:CHSI)), we highlight CAH as another potential opp. While investors may have different views on this trend, we believe it highlights how cheap some stocks are trading on EV/EBITDA, and CAH is the cheapest in our group at only 6.8x CY11e and 5.9x CY12e EBITDA."

UBS reiterates a "Buy" rating on Cardinal Health, which closed Thursday at $40.63, up $0.38, or 0.94 percent. UBS raised their price target on Cardinal Health from $44 to $47.