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Conshohocken, Pennsylvania-based Cencora, Inc. (COR), is a powerhouse in pharmaceutical distribution and healthcare solutions, boasting a $47.8 billion market cap. It seamlessly manages distribution, logistics, and consulting to keep the world’s pharmaceutical and biotech giants running smoothly. Whether it is ensuring life-saving medications reach patients or offering tailored strategies to healthcare providers, Cencora connects the dots in an ever-evolving industry. It is not just about moving products but moving healthcare forward.
Shares of the prescription drug distributor rallied 23.2% over the past 52 weeks, underperforming the broader S&P 500 Index ($SPX), which rallied nearly 30.6%. In 2024, COR is up 17%, trailing behind SPX’s 23.6% rise on a YTD basis.
However, narrowing the focus, COR is outperforming the VanEck Pharmaceutical ETF’s (PPH) 12% gains over the past 52 weeks and also the exchange traded fund’s 6.4% returns on a YTD basis.
Cencora’s stock may not have surged as much as the broader market, but it remains in the green. The company’s solid performance in U.S. Healthcare Solutions, particularly in specialty products like GLP-1 drugs, has driven gains. Despite this, Cencora’s mixed outlook reflects a balanced view - growth potential tempered by market challenges.
The focus on strategic capital deployment and efficiency highlights Cencora’s commitment to long-term growth, even as it navigates a competitive healthcare landscape. Wall Street has taken notice, especially with its impressive streak of dividend growth spanning over two decades.
Shares of Cencora have edged up nearly 5% after the company reported its stronger-than-projected Q4 earnings results on Nov. 6. Its revenue climbed 14.7% year over year to $79.1 billion, while its adjusted EPS rose 16.8% annually to $3.34. Additionally, the company issued its outlook for fiscal 2025 earnings and revenues. Adjusted EPS is estimated to be between $14.80 and $15.10, while revenues are projected to rise between 7% and 9%.
For the current fiscal year, ending in September 2025, analysts expect Cencora’s EPS to rise 8.5% to $14.93. The company’s earnings surprise history is solid. It beat the consensus estimate in each of the last four quarters.
COR stock has a consensus “Moderate Buy” rating overall. Among the 15 analysts in coverage, 10 suggest a “Strong Buy,” and the remaining five analysts recommend a “Hold.”
This configuration is slightly less bullish than three months ago, with 11 analysts advising a “Strong Buy.”
However, following Cencora’s robust earnings and promising guidance, Baird hiked its price target to $292, a Street-high signaling 20.2% upside potential. Additionally, the brokerage firm maintained its “Outperform” rating on the stock. Baird praised its game-changing management services organization (MSO) deal, marking its entry into a promising niche for distributors. Cencora’s strategic vision is clearly sharpening, and the market is watching closely.
The mean price target of $271.43 implies that the stock could rally as much as 11.8%.
