Argus analyst David Toung upgraded Cardinal Health to Buy from Hold with a price target of $85, citing his expectations of "sustainable EPS growth" supported by the company's ability to improve margins in the its Pharmaceutical Distribution and Medical segments. Toung notes that there is opportunity for further margin improvement after the company boosted its Q2 gross margins by 43bps from the prior year. The analyst adds that Cardinal Health trades at 10.3-times his expected FY19 EPS view, which is a slight discount to its peer healthcare distributors' average of 10.8-times and offers an attractive valuation based on the company's recent performance strength and margin expansion prospects.