Conshohocken, Pennsylvania-based Cencora, Inc. (COR) stands tall in the pharmaceutical distribution industry with a $47.8 billion market cap. This company expertly manages distribution, logistics, and consulting to keep major pharmaceutical and biotech companies on track. Its role extends beyond product movement; Cencora actively enhances healthcare delivery.
Stock Performance: A Mixed Picture in a Competitive Landscape
Over the last 52 weeks, shares of the prescription drug distributor rallied 23.2%, which is lower than the S&P 500 Index ($SPX) that has gained nearly 30.6%. In 2024, COR is showing a rise of 17%, while SPX has increased by 23.6% on a year-to-date (YTD) basis.
By comparison, Cencora has outpaced the VanEck Pharmaceutical ETF’s (PPH) 12% gains over the past year and the ETF’s 6.4% returns YTD.
Strong Earnings Report Provides a Boost
Cencora’s stock may not have soared like some others, but it remains positive. The company’s strong performance in U.S. Healthcare Solutions, particularly with specialty products such as GLP-1 drugs, has contributed to its gains. Nevertheless, its outlook is mixed, indicating growth potential despite some market hurdles.
The focus on strategic capital deployment showcases Cencora’s commitment to long-term development as it faces a challenging healthcare environment. Wall Street is closely watching, especially given the company’s impressive dividend growth that has lasted over two decades.
After Cencora reported stronger-than-expected Q4 earnings results on November 6, shares edged up nearly 5%. Its revenue climbed 14.7% year over year to $79.1 billion, and its adjusted EPS increased 16.8% annually to $3.34. The company has also provided an outlook for fiscal 2025 earnings and revenues, estimating adjusted EPS to be between $14.80 and $15.10, with revenues projected to increase by 7% to 9%.
Analysts Weigh In: A Moderate Buy
For the current fiscal year, which ends in September 2025, analysts anticipate a 8.5% rise in Cencora’s EPS, bringing it to $14.93. The company has consistently exceeded expectations by beating the consensus estimate in each of the last four quarters.
COR stock carries a consensus “Moderate Buy” rating among the 15 analysts covering it. Of these, 10 analysts suggest a “Strong Buy,” while the remaining five recommend a “Hold.”
This rating shows a slight decline from three months prior, where 11 analysts had recommended a “Strong Buy.”
After Cencora’s robust earnings and optimistic outlook, Baird raised its price target to $292, indicating a 20.2% potential upside. The brokerage maintained its “Outperform” rating, highlighting Cencora’s innovative management services organization (MSO) deal, which marks its entry into a promising market niche for distributors. The company’s strategic direction is becoming clearer, and investors are taking note.
The average price target of $271.43 suggests that the stock could increase by as much as 11.8% in the near term.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
