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Cencora Rallies 19.7% Year to Date: What's Driving the Stock?
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Cencora, Inc. (COR - Free Report) witnessed strong momentum in the year-to-date period. Shares of the company have rallied 19.7% against 8.9% decline of the industry. The S&P 500 composite has risen 24.5% during the same time frame.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.
Chesterbrook, PA-based Cencora is one of the world’s largest pharmaceutical service companies. It focuses on providing drug distribution and related services to reduce healthcare costs and improve patient outcomes. The company is well-positioned to deliver long-term sustainable growth on the back of its diverse and inclusive teams.
Image Source: Zacks Investment Research
Factors Favoring COR’s Growth
The rally in the company’s share price can be attributed to the robust growth in the company’s U.S. Healthcare Solutions segment. The optimism, led by a solid fourth-quarter fiscal 2024 performance and robust business potential, is expected to contribute further.
Cencora exited the fiscal fourth quarter on a strong note, wherein its earnings and revenues beat the Zacks Consensus Estimate. The company continues to witness a robust segmental performance due to growth in all markets and strong demand for specialty products and GLP-1 drugs. Per management, Cencora delivered a solid performance by playing a crucial role in the healthcare system while maintaining efficiency throughout its business. The company has been focused on its priorities and thoughtful capital deployments to deliver long-term growth.
During its fourth-quarter fiscal 2024 earnings release, COR announced that it has entered a definitive agreement to acquire Retina Consultants of America, a leading management services organization of retina specialists. This acquisition should boost the company’s presence in the retina treatment space.
For fiscal 2025, adjusted earnings per share (EPS) are estimated to be in the range of $14.80-$15.10, indicating growth of 8-10% from the prior-year level. Revenues are projected to rise 7-9%. Revenues at the U.S. Healthcare Solutions segment and the International Healthcare solutions business are estimated to increase 7-9%. Adjusted operating income is expected to improve 5-6.5%.
Cencora is an ideal partner for manufacturers looking to launch their products. This is due to its extensive worldwide distribution network and global platform of commercialization services. Thanks to its growing presence in the pharmaceutical industry, Cencora can establish partnerships with pharmaceutical companies at an early stage of product development and market itself as an integrated partner capable of assisting in the successful commercialization of its products (in addition to providing logistics and distribution services). These factors are likely to have favored the stock’s growth.
Risk Factors
COR’s gross margin continues to be hurt by lower-margin GLP-1 drugs and lack of exclusive COVID-19 therapy sales, which had higher gross profit margins. The company’s rising expenses to support business activities amid inflationary challenges put pressure on the operating margin. Cut-throat competition in the MedTech space is another headwind.
COR’s earnings per share for fiscal 2025 and 2026 are projected to grow 8.1% and 9.5%, respectively, to $14.88 and $16.209 on a year-over-year basis. The Zacks Consensus Estimate for EPS has risen 0.9% for 2025 and 1.2% for 2026 in the past 30 days.
Revenues for fiscal 2025 and 2026 are anticipated to rise 7.3% and 6.7%, respectively, to $315.26 billion and $336.52 billion on a year-over-year basis.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Masimo’s shares have risen 37.2% year to date compared with the industry’s 6.7% growth.
AngioDynamics, carrying a Zacks Rank #2 at present, has an estimated growth rate of 38.2% for 2025. ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 8.9% year to date against the industry’s 6.7% growth.
GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 56.5% year to date compared with the industry’s 6.7% growth.
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Cencora Rallies 19.7% Year to Date: What's Driving the Stock?
Cencora, Inc. (COR - Free Report) witnessed strong momentum in the year-to-date period. Shares of the company have rallied 19.7% against 8.9% decline of the industry. The S&P 500 composite has risen 24.5% during the same time frame.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.
Chesterbrook, PA-based Cencora is one of the world’s largest pharmaceutical service companies. It focuses on providing drug distribution and related services to reduce healthcare costs and improve patient outcomes. The company is well-positioned to deliver long-term sustainable growth on the back of its diverse and inclusive teams.
Image Source: Zacks Investment Research
Factors Favoring COR’s Growth
The rally in the company’s share price can be attributed to the robust growth in the company’s U.S. Healthcare Solutions segment. The optimism, led by a solid fourth-quarter fiscal 2024 performance and robust business potential, is expected to contribute further.
Cencora exited the fiscal fourth quarter on a strong note, wherein its earnings and revenues beat the Zacks Consensus Estimate. The company continues to witness a robust segmental performance due to growth in all markets and strong demand for specialty products and GLP-1 drugs. Per management, Cencora delivered a solid performance by playing a crucial role in the healthcare system while maintaining efficiency throughout its business. The company has been focused on its priorities and thoughtful capital deployments to deliver long-term growth.
During its fourth-quarter fiscal 2024 earnings release, COR announced that it has entered a definitive agreement to acquire Retina Consultants of America, a leading management services organization of retina specialists. This acquisition should boost the company’s presence in the retina treatment space.
For fiscal 2025, adjusted earnings per share (EPS) are estimated to be in the range of $14.80-$15.10, indicating growth of 8-10% from the prior-year level. Revenues are projected to rise 7-9%. Revenues at the U.S. Healthcare Solutions segment and the International Healthcare solutions business are estimated to increase 7-9%. Adjusted operating income is expected to improve 5-6.5%.
Cencora is an ideal partner for manufacturers looking to launch their products. This is due to its extensive worldwide distribution network and global platform of commercialization services. Thanks to its growing presence in the pharmaceutical industry, Cencora can establish partnerships with pharmaceutical companies at an early stage of product development and market itself as an integrated partner capable of assisting in the successful commercialization of its products (in addition to providing logistics and distribution services). These factors are likely to have favored the stock’s growth.
Risk Factors
COR’s gross margin continues to be hurt by lower-margin GLP-1 drugs and lack of exclusive COVID-19 therapy sales, which had higher gross profit margins. The company’s rising expenses to support business activities amid inflationary challenges put pressure on the operating margin. Cut-throat competition in the MedTech space is another headwind.
Cencora, Inc. Price
Cencora, Inc. price | Cencora, Inc. Quote
A Look at Estimates
COR’s earnings per share for fiscal 2025 and 2026 are projected to grow 8.1% and 9.5%, respectively, to $14.88 and $16.209 on a year-over-year basis. The Zacks Consensus Estimate for EPS has risen 0.9% for 2025 and 1.2% for 2026 in the past 30 days.
Revenues for fiscal 2025 and 2026 are anticipated to rise 7.3% and 6.7%, respectively, to $315.26 billion and $336.52 billion on a year-over-year basis.
Key Picks
Some other top-ranked stocks from the medical industry are Masimo (MASI - Free Report) , AngioDynamics (ANGO - Free Report) and Globus Medical (GMED - Free Report) .
Masimo, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 10.4% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Masimo’s shares have risen 37.2% year to date compared with the industry’s 6.7% growth.
AngioDynamics, carrying a Zacks Rank #2 at present, has an estimated growth rate of 38.2% for 2025. ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 8.9% year to date against the industry’s 6.7% growth.
GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 56.5% year to date compared with the industry’s 6.7% growth.