CareFusion CorpCFN

Morningstar Rating

Stock Research and Analysis

by Michael Waterhouse

Market leadership in many of its operating segments makes CareFusion an essential hospital device provider across the United States. If CareFusion can maintain product innovation and boost profitability through restructuring, then we think it has the Read more

Bulls Say

CareFusion should steal market share as a result of the Baxter Colleague pump recall.

CareFusion's high-priority devices and recurring consumables revenue make the firm less sensitive to hospital spending cycles.

Once macroeconomic factors improve, CareFusion's revenue growth and margins should improve as customers shift to high-end product lines.

As the market leader in many of its product categories, CareFusion has a large installed base of devices. CareFusion can easily defend its market position because customers rarely switch brands. Read more

Bears Say

CareFusion's growth and profitability will remain depressed as long as the economy weighs down hospital expenditures.

CareFusion has been a public company for a short time, and without the financial and marketing support of Cardinal Health, it could struggle as a standalone entity.

CareFusion will face difficulty expanding into product categories that it does not have expertise. Acquiring new products may increase revenue, but returns on capital may suffer.

Like Baxter and Hospira, CareFusion is familiar with quality-control issues, as its own Alaris pump ship hold ended in 2009. Future quality-control issues easily could damage CareFusion's reputation. Read more

Management

We give CareFusion standard marks for shareholder stewardship. Because CareFusion as a standalone company is a newcomer to the public markets, we plan to monitor management's actions closely in the near future. So far, we think management's capital Read more

Profile

CareFusion has two operating segments: medical systems and procedural solutions. The medical systems segment manufactures and markets infusion pumps, medication dispensers, Read more