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Cencora to Report Q1 Earnings: Is a Beat Likely for the Stock?

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Cencora (COR - Free Report) is slated to report first-quarter fiscal 2025 results on Feb. 05, before market open.

In the last reported quarter, the company delivered an earnings surprise of 4.05%. COR’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 6.97%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Q1 Estimates

The Zacks Consensus Estimate for revenues is pegged at $78.12 billion, up 8.1% from the prior-year quarter’s level. The consensus mark for earnings is pinned at $3.50 per share, indicating an improvement of 6.7% from the prior-year quarter’s figure.

Factors to Consider

In the fourth quarter of fiscal 2024, revenues at U.S. Healthcare Solutions totaled $71.7 billion, up 15.7% year over year. The company continues to witness a strong segmental performance due to overall market growth on hiked unit volume, including increased sales of GLP-1 drugs and specialty products. Demand for the recently approved GLP-1 drugs for diabetes and/or weight loss is likely to have grown higher in the to-be-reported quarter as well. This is likely to be reflected in the fiscal first-quarter results. Our model expects revenues for this segment to be $69.84 billion and the segment’s adjusted operating income to be $735.1 million.

However, during the fourth quarter of fiscal 2024, COR’s International Healthcare Solutions segment witnessed revenue growth of 5.5% but a decline in operating income on a reported basis compared with the prior-year quarter.

Per management, this was due to the continuation of higher information technology expenses for COR’s European distribution business and a lower operating income of the Canada business, partially offset by the higher operating income of the global specialty logistics business. This segmental performance is likely to have continued in the to-be-reported quarter as well. This may be reflected in the fiscal first-quarter results. Our model expects the segment’s adjusted operating income and revenues to be $147.7 million and $7.45 billion, respectively.

However, the PharmaLex business growth is not keeping up with original expectations as the outsourced pharma services market faces broader demand challenges. The challenges are likely to have continued in the fiscal first quarter, thereby hurting top-line growth.

COR completed the acquisition of Retina Consultants of America, a leading management services organization (MSO) of retina specialists last month. The acquisition adds a clear leader in the Retina MSO space, broadening community provider relationships in a high-growth segment.This acquisition fits squarely in Cencora's pharmaceutical-centric strategy, and the company may provide integration updates on its first-quarter earnings call.

Earnings Beat Likely

Our proven model predicts an earnings beat for Cencora this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.63%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Cencora currently has a Zacks Rank #2.

Other Stocks Worth a Look

Here are some other medical stocks worth considering, as these, too, have the right combination of elements to post an earnings beat this reporting cycle.

Natera (NTRA - Free Report) has an Earnings ESP of +61.91% and a Zacks Rank #1 at present.

NTRA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.37%. The Zacks Consensus Estimate for the fourth-quarter EPS implies a rise of 34.4% from the year-ago reported figure.You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo (MASI - Free Report) has an Earnings ESP of +4.05% and a Zacks Rank #2 at present. 

The company is scheduled to release fourth-quarter 2024 results on Feb. 25. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for EPS implies an improvement of 14.4% from the year-ago reported figure.

Maravai LifeSciences (MRVI - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2 at present. The company is expected to release fourth-quarter 2024 results in February.

MRVI delivered a trailing four-quarter average earnings surprise of 116.67%. The Zacks Consensus Estimate for fourth-quarter EPS implies a decline of 400% from the year-ago reported figure.

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