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Cencora (COR)
NYSE:COR

Cencora (COR) AI Stock Analysis

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CO

Cencora

(NYSE:COR)

Rating:76Outperform
Price Target:
$315.00
▲( 7.75% Upside)
Cencora is performing strongly with robust revenue growth, operational efficiency, and effective cost management. The high leverage is a notable risk, but the company's strategic focus on expanding its specialty medication offerings and raising guidance reflects confidence in future performance. The technical analysis and valuation suggest caution, as the stock may be experiencing consolidation, and the high P/E ratio points to potential overvaluation.
Positive Factors
Financial Performance
The company's adjusted EPS beat estimates, showcasing strong financial performance.
Growth Strategy
Cencora, Inc.'s acquisition strategies, including those of RCA and OneOncology, have enhanced its Specialty income streams, providing opportunities for further expansion.
Market Position
The focus on winning in the Specialty Rx market and deepening relationships with specialty providers aligns with a strong strategy for COR.
Negative Factors
Customer Relations
There is uncertainty around the relationship with WBA, which is COR’s largest customer, as recent commentary sounded somewhat adversarial.
International Performance
The international segment of Cencora, Inc. showed disappointing performance, with an expected guide down due to slow clinical trial activity.
Valuation Concerns
Valuation feels relatively full compared to significant discounts across much of the rest of the coverage universe.

Cencora (COR) vs. SPDR S&P 500 ETF (SPY)

Cencora Business Overview & Revenue Model

Company DescriptionCencora, Inc. sources and distributes pharmaceutical products. Its U.S. Healthcare Solutions segment distributes pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers. The company also provides pharmacy management, staffing, and other consulting services; supply management software to retail and institutional healthcare providers; packaging solutions to various institutional and retail healthcare providers; clinical trial support, product post-approval, and commercialization support services; data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers; and pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and other products to the companion animal and production animal markets. In addition, this segment distributes plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products; and provides other services primarily to physicians who specialize in various disease states, primarily oncology, as well as to other healthcare providers, including hospitals and dialysis clinics. The company's International Healthcare Solutions segment offers international pharmaceutical wholesale and related service, and global commercialization services; and distributes pharmaceuticals, other healthcare products, and related services to pharmacies, doctors, health centers and hospitals primarily in Europe. This segment also provides specialty transportation and logistics services for the biopharmaceutical industry. The company was formerly known as AmerisourceBergen Corporation and changed its name to Cencora, Inc. in August 2023. Cencora, Inc. was incorporated in 2001 and is headquartered in Conshohocken, Pennsylvania.
How the Company Makes MoneyCencora makes money primarily through its pharmaceutical distribution services, acting as a critical intermediary between drug manufacturers and healthcare providers, such as hospitals and pharmacies. The company purchases pharmaceuticals and medical products from manufacturers and distributes them to healthcare facilities, earning revenue from the markup on these products. Additionally, Cencora generates income through value-added services, such as supply chain management, consulting, and technology solutions that improve operational efficiencies for its clients. Significant partnerships with pharmaceutical companies and healthcare organizations contribute to its earnings by ensuring a steady flow of products and services. The company also benefits from economies of scale and an extensive logistics network, which enhance its competitive positioning and profitability.

Cencora Financial Statement Overview

Summary
Cencora shows strong revenue growth and stable profitability margins, yet faces high leverage and negative cash flows that pose risks to financial stability. While operational performance is resilient, addressing leverage and cash flow challenges is vital for growth.
Income Statement
85
Very Positive
Cencora demonstrates strong revenue growth with a consistent increase from $189.89 billion in 2020 to $303.19 billion in TTM 2024, indicating robust market demand. Gross profit and net profit margins have remained stable, with a recent gross profit margin of 3.1% and net profit margin of 0.46% as of TTM 2024, reflecting efficiency in operations. The EBIT and EBITDA margins show consistent performance around 0.8% and 0.96%, respectively, indicating healthy operational profitability. However, the slight decline in net income in TTM 2024 compared to previous periods suggests a need for careful monitoring of profitability.
Balance Sheet
60
Neutral
The balance sheet reveals a concerning high leverage with a debt-to-equity ratio of 22.52 in TTM 2024, posing a potential risk to financial stability. While the company's total assets have grown to $69.05 billion, the stockholders' equity remains low at $361.9 million, limiting financial flexibility. The equity ratio is a mere 0.52%, indicating significant reliance on debt. Despite these risks, the company has managed to increase its total assets consistently, showing underlying business growth.
Cash Flow
70
Positive
Cencora's cash flow analysis shows a negative operating cash flow in TTM 2024, which is a point of concern. The free cash flow has also turned negative at -$638 million, contrasting with positive cash flows in previous years. The operating cash flow to net income ratio has dropped significantly, indicating potential cash-generation issues. Although the past years have shown positive free cash flow, the recent downturn suggests a need for improved cash flow management.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
303.19B293.96B262.17B238.59B213.99B189.89B
Gross Profit
9.40B9.91B8.96B8.33B6.77B5.20B
EBIT
2.41B2.18B2.34B2.37B2.35B-5.14B
EBITDA
3.17B3.25B3.41B3.11B2.91B-4.75B
Net Income Common Stockholders
1.40B1.51B1.75B1.70B1.54B-3.41B
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.07B3.13B2.59B3.39B2.55B4.60B
Total Assets
63.87B67.10B62.56B56.56B57.34B43.95B
Total Debt
5.25B4.39B4.79B5.70B6.68B4.12B
Net Debt
3.18B1.26B2.20B2.31B4.14B-478.23M
Total Liabilities
62.64B66.31B61.89B56.49B56.75B44.79B
Stockholders Equity
1.23B645.94M666.29M-289.78M223.35M-839.64M
Cash FlowFree Cash Flow
-638.10M3.00B3.45B2.21B2.23B1.84B
Operating Cash Flow
-119.25M3.48B3.91B2.70B2.67B2.21B
Investing Cash Flow
-895.34M-618.10M-2.60B-368.44M-6.14B-379.87M
Financing Cash Flow
1.43B-2.33B-2.22B-1.75B1.95B-603.62M

Cencora Technical Analysis

Technical Analysis Sentiment
Positive
Last Price292.35
Price Trends
50DMA
280.93
Positive
100DMA
263.08
Positive
200DMA
248.54
Positive
Market Momentum
MACD
2.82
Negative
RSI
57.64
Neutral
STOCH
76.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COR, the sentiment is Positive. The current price of 292.35 is above the 20-day moving average (MA) of 288.58, above the 50-day MA of 280.93, and above the 200-day MA of 248.54, indicating a bullish trend. The MACD of 2.82 indicates Negative momentum. The RSI at 57.64 is Neutral, neither overbought nor oversold. The STOCH value of 76.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COR.

Cencora Risk Analysis

Cencora disclosed 33 risk factors in its most recent earnings report. Cencora reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Cencora Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
CNCNC
77
Outperform
$30.83B9.0412.59%8.85%33.30%
COCOR
76
Outperform
$56.23B33.67161.58%0.73%12.18%-5.92%
MCMCK
72
Outperform
$89.98B27.9651.23%0.38%16.22%15.29%
CACAH
68
Neutral
$36.40B23.81-43.80%1.32%0.78%183.45%
CVCVS
65
Neutral
$80.63B15.237.00%4.28%4.84%-26.54%
GSGSK
63
Neutral
$76.74B19.7022.26%3.94%4.17%-29.96%
53
Neutral
$5.14B3.06-43.57%2.81%16.81%-0.12%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
COR
Cencora
292.35
75.33
34.71%
CAH
Cardinal Health
152.75
58.05
61.30%
CNC
Centene
56.41
-18.22
-24.41%
CVS
CVS Health
60.83
7.75
14.60%
GSK
GlaxoSmithKline
38.66
-4.60
-10.63%
MCK
McKesson
716.09
157.94
28.30%

Cencora Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q2-2025)
|
% Change Since: 0.72%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
Cencora showcased strong financial performance with significant revenue and EPS growth, and raised guidance due to the success of its U.S. Healthcare Solutions segment and effective cost management. However, challenges in the international segment and increased interest expenses slightly offset these positive outcomes.
Q2-2025 Updates
Positive Updates
Strong Revenue and EPS Growth
Cencora reported a 10% increase in revenue and a 16% increase in adjusted diluted EPS for the second quarter of fiscal 2025.
Raised Guidance
Cencora raised its full-year guidance for adjusted operating income and adjusted diluted EPS due to strong U.S. Healthcare Solutions earnings performance and expectations for continued growth.
U.S. Healthcare Solutions Success
The U.S. Healthcare Solutions segment saw revenue grow by 11%, driven by strong utilization trends and growth in specialty products.
Effective Cost Management
Excluding RCA, Cencora maintained modest operating expense growth while focusing on productivity initiatives.
Successful Integrations and Strategic Investments
Cencora successfully integrated its U.S. and European 3PL businesses and continues to invest in capabilities and talent across its operations.
Negative Updates
International Segment Challenges
The International Healthcare Solutions segment faced market softness, particularly in the global specialty logistics business, due to subdued clinical trial activity.
SLight Revenue Growth in International Segment
International Healthcare Solutions revenue grew by only 1% as reported and 6% on a constant-currency basis, leading to a reduction in segment operating income guidance.
Interest Expense Increase
Net interest expense increased by $40 million compared to the prior-year quarter, primarily due to financing for the RCA acquisition.
Company Guidance
During Cencora's fiscal 2025 second quarter earnings call, the company announced a strong financial performance with revenue growth of 10% and adjusted diluted EPS growth of 16%. As a result, Cencora raised its full-year guidance for adjusted operating income and adjusted diluted EPS, with EPS now expected to be in the range of $15.70 to $15.95, representing growth of 14% to 16%. The U.S. Healthcare Solutions segment was a significant contributor, showing a 23% increase in operating income, driven by strong utilization trends and growth in specialty products. The company also highlighted the successful integration of Retina Consultants of America and the expansion of its specialty medication offerings across geographies. International Healthcare Solutions' performance was impacted by a subdued clinical trial activity, leading to a slight downward revision in its revenue growth outlook. Overall, Cencora remains focused on leveraging its expertise, deepening customer partnerships, and expanding its global leadership in specialty medications to drive continued growth.

Cencora Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Cencora Completes €1 Billion Senior Notes Sale
Neutral
May 22, 2025

On May 22, 2025, Cencora, Inc. completed the sale of €1 billion in senior notes, split equally between 2.875% notes due in 2028 and 3.625% notes due in 2032. These notes are unsecured and unsubordinated obligations, with specific terms outlined in the Indentures, which include limitations on creating liens, sale and leaseback transactions, and mergers. The issuance of these notes is significant for Cencora’s financial strategy, potentially impacting its market positioning by providing liquidity while imposing certain operational constraints.

The most recent analyst rating on (COR) stock is a Hold with a $245.00 price target. To see the full list of analyst forecasts on Cencora stock, see the COR Stock Forecast page.

Private Placements and Financing
Cencora Enters €1 Billion Senior Notes Agreement
Neutral
May 19, 2025

On May 15, 2025, Cencora, Inc. entered into an Underwriting Agreement with several financial institutions for the issuance and sale of €1 billion in senior notes, split between €500 million due in 2028 and €500 million due in 2032. These notes are senior unsecured obligations, and the company expects to complete the sale by May 22, 2025, with net proceeds of approximately €994 million intended for general corporate purposes. The underwriters involved have previously provided various financial services to Cencora and may continue to do so in the future.

The most recent analyst rating on (COR) stock is a Hold with a $245.00 price target. To see the full list of analyst forecasts on Cencora stock, see the COR Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Cencora Reports Strong Q2 2025 Financial Results
Positive
May 7, 2025

On May 7, 2025, Cencora announced its fiscal 2025 second-quarter results, reporting a 10.3% year-over-year revenue increase to $75.5 billion. The company also raised its adjusted diluted EPS guidance for fiscal 2025, reflecting strong performance driven by its U.S. Healthcare Solutions segment and strategic acquisitions like Retina Consultants of America. This growth underscores Cencora’s role in the healthcare supply chain and its focus on operational excellence, which is expected to continue driving resilient financial performance.

Business Operations and StrategyFinancial Disclosures
Cencora to Update 2025 Financial Guidance at Conference
Positive
Mar 10, 2025

On March 10, 2025, Cencora, Inc. executives will present at the Leerink Partners Global Healthcare Conference, where they will update their fiscal year 2025 financial guidance. The adjusted diluted earnings per share for fiscal 2025 is now projected to be between $15.30 and $15.60, reflecting positive momentum in their core U.S. Healthcare Solutions segment.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.