Core Viewpoint - Cencora, Inc. plans to release its First Quarter Fiscal 2026 results on February 4, 2026, before the market opens [1] Group 1 - The conference call to discuss the results will take place at 8:30 a.m. ET on the same day [1] - Key executives participating in the conference call include Robert P. Mauch, President & CEO, and James F. Cleary, Executive Vice President [1]

Company Overview - Cencora Inc (NYSE:COR) is a significant player in the medical sector, focusing on specialty drugs and healthcare solutions [1][5] - The company's market capitalization is approximately $64.37 billion, indicating its substantial presence in the industry [4][5] Stock Performance - On January 5, 2026, Bank of America Securities adjusted its rating for Cencora to Neutral, with the stock priced at $332.12, reflecting a decrease of 1.99% or $6.75 for the day [1][5] - The stock has experienced a 52-week high of $377.54 and a low of $227.95, showcasing significant volatility [2] Market Trends - Wall Street analysts maintain a bullish outlook for Cencora, driven by the adoption of artificial intelligence and increased demand for specialty drugs [2][5] - The medical sector is transitioning from a defensive position to a growth engine, with artificial intelligence enhancing efficiency and precision in diagnostics and drug discovery [3] Trading Activity - Cencora's daily trading volume is 227,149 shares, with a trading range of $329.10 to $337.31, reflecting the dynamic nature of the market [4]

Market Performance - Major U.S. indexes ended the Christmas-shortened week higher, with the S&P 500 and Dow reaching new record highs, gaining 0.75% and 0.72% respectively, while the Nasdaq Composite increased by 0.70% [1] - The U.S. GDP growth rate for Q3 2025 was 4.3%, exceeding expectations and marking the fastest growth since Q3 2023 [2] - Despite a decline in consumer confidence, investor optimism is driven by strong corporate earnings outlook and AI enthusiasm [2] Stock Performance - Castle Biosciences, Inc. (CSTL) shares increased by 77.9% since being upgraded to a Zacks Rank 1 (Strong Buy) on October 20, significantly outperforming the S&P 500's 3.8% increase [3][6] - F.N.B. Corporation (FNB) shares rose by 13.4% after its upgrade to Zacks Rank 2 (Buy) on October 21, compared to the S&P 500's 2.8% increase [4] - Hamilton Insurance Group, Ltd. (HG) and Kinross Gold Corporation (KGC) saw gains of 19.8% and 7.7% respectively since their upgrade to Outperform on October 17 [7] Portfolio Performance - A hypothetical portfolio of Zacks Rank 1 stocks returned +14.3% in 2025, slightly underperforming the S&P 500's +14.9% [11] - The Zacks Model Portfolio has outperformed the S&P 500 index by over 12 percentage points since 1988, with an annualized average return of +23.9% compared to +11.5% for the S&P 500 [13] - The Zacks Earnings Certain Admiral Portfolio (ECAP) returned -1.30% in Q3 2025, underperforming the S&P 500's +8.1% gain [15] Dividend Portfolio Performance - Johnson & Johnson (JNJ) returned 14.3% over the past 12 weeks, while 3M Company (MMM) increased by 5.2% during the same period [18] - The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -0.01% in Q3 2025, compared to the S&P 500's +8.1% gain [19]

Industry Overview - The Medical sector is undergoing a significant transformation as it approaches 2026, shifting from a defensive haven to a growth engine driven by innovation and demographic demand [1] - Key trends include the integration of artificial intelligence into clinical workflows, enhancing efficiency and precision in diagnostics and drug discovery [2] - The industry faces cost inflation and regulatory changes, pushing providers towards value-based care and operational innovation, while aging populations and chronic diseases sustain long-term demand [3] Stock Recommendations - Analysts are bullish on three medical stocks: Cencora, Inc. (COR), Addus HomeCare Corporation (ADUS), and Select Medical Holdings Corporation (SEM), due to their operational strength and long-term growth potential [4][5] - All three stocks have a Zacks Rank 2 (Buy), a VGM Score of A, and a market capitalization exceeding $1 billion, with over 70% of brokers rating them as a strong buy or buy [6] Cencora, Inc. (COR) - Cencora is benefiting from higher unit volume and improved sales of GLP-1 drugs and specialty products, with strong performance in Canada and strategic investments in European distribution [10] - The Zacks Consensus Estimate for COR's fiscal 2026 earnings is $17.62 per share, indicating a 10.1% year-over-year increase, with six upward estimate revisions in the past 60 days [12] Addus HomeCare Corporation (ADUS) - Addus provides personal care services to elderly and chronically ill individuals, with stable hiring trends and growing market size due to the cost benefits of home-based healthcare [13] - The Zacks Consensus Estimate for ADUS's 2025 earnings is $6.19 per share, signaling a 17.7% year-over-year growth, followed by a 10.7% increase in 2026 to $6.85 [15] Select Medical Holdings Corporation (SEM) - Select Medical operates critical illness recovery facilities and rehabilitation clinics, with strategic expansions and rising patient admissions driving performance [16] - The Zacks Consensus Estimate for SEM's 2025 earnings is $1.23 per share, indicating a 30.9% year-over-year jump, followed by a 9.9% increase in 2026 to $1.36 [18]

Summary of Healthcare Services Conference Call Industry Overview - The conference call focused on the **Healthcare Services** industry, particularly the **Managed Care** sector and its outlook for 2026, highlighting potential margin improvements and policy clarity as positive factors for growth [4][10][11]. Key Points and Arguments Managed Care - **Earnings Recovery**: Most Managed Care Organizations (MCOs) are expected to reach trough earnings in 2026, with potential upward revisions thereafter. Medicare Advantage (MA) is anticipated to drive margin upside, while skepticism remains around Medicaid and ACA Exchanges until MCOs demonstrate margin improvements [5][12]. - **Enrollment Trends**: MCOs are targeting enrollment declines to improve margins, with companies like CVS, ELV, and UNH focusing on this strategy. Conversely, HUM is positioned for membership growth [12][52]. - **Regulatory Environment**: The 2026 midterms are expected to create gridlock, reducing the likelihood of major policy changes outside of CMS rulemaking, which could stabilize the operating environment for MCOs [5][12]. Pharmaceutical Distributors - **Strong Fundamentals**: The current strength in results for pharmaceutical distributors is attributed to stable generic pricing, MSO growth, and a robust specialty pipeline. Companies like McKesson (MCK) and Cencora (COR) are favored due to their strong specialty businesses [9][16]. - **M&A Activity**: Distributors led M&A activity in 2025, with expectations for continued integration and organic investment in MSO capabilities in 2026 [25]. Labs and Healthcare Facilities - **Demand Trends**: Labs are expected to see steady demand trends with a healthy backdrop in diagnostics. Regulatory uncertainties may impact pricing and mix development, but overall operating conditions are stable [9][12]. - **Facility Performance**: Healthcare facilities are positioned to benefit from favorable utilization trends, although policy uncertainty remains a concern for future earnings growth [12][16]. Additional Insights - **Investment Picks**: Top investment picks include UnitedHealth (UNH) and CVS Health (CVS) for their cleaner stories, while Cigna (CI) is seen as attractive but with more complexities [5][14][17]. - **Margin Pressures**: Medicaid remains a challenge, with companies like ELV and UNH guiding for margin pressure in 2026. Investment income is also expected to be a headwind for managed care [5][12]. - **Market Dynamics**: The ACA Exchanges are viewed as a swing factor for MCOs, with a wide range of outcomes expected due to potential shifts in market morbidity [12][43]. Conclusion The healthcare services industry is navigating a complex landscape with potential for margin recovery and growth driven by Medicare Advantage, while facing challenges in Medicaid and ACA Exchanges. The focus on regulatory clarity and strategic M&A activity will be crucial for companies as they prepare for 2026 and beyond.

Group 1 - Cencora, Inc. (NYSE:COR) is recognized for distributing pharmaceuticals, vaccines, plasma products, and healthcare supplies, and also supports clinical trials and specialty distribution [1] - Jim Cramer highlighted Cencora as a strong performer in the pharmaceutical distribution sector, noting its recent earnings report which showed a slight top line miss but a significant earnings beat of 31 cents off a $4.11 basis [1] - Cramer compared Cencora favorably to Cardinal Health and McKesson, stating that these companies are consistently high performers in the market [1] Group 2 - The article suggests that while Cencora has potential as an investment, certain AI stocks may offer greater upside potential and less downside risk [2]

Core Insights - Cencora, Inc. (COR) has agreed to acquire a majority of OneOncology's equity for $3.6 billion, enhancing its strategic control and supporting its pharmaceutical-centric strategy [2][9] - The acquisition is expected to strengthen COR's ability to support specialty physicians and improve cancer care navigation and access to novel therapies [5][12] Financial Guidance - Management has raised long-term guidance for adjusted operating income growth to 7%-10% and adjusted diluted EPS growth to 10%-14% for COR's U.S. Healthcare Solutions segment [3][9] - The acquisition is projected to have a neutral impact on fiscal 2026 adjusted earnings per share, with expectations closer to the lower end of the range of $17.45 to $17.75 [11] Market Position and Performance - COR's market capitalization stands at $66.53 billion [6] - Following the acquisition announcement, COR shares have decreased by 2.8%, although they have risen 14.8% over the past six months, outperforming the industry and the S&P 500 [4] Acquisition Details - The transaction values OneOncology at an enterprise value of $7.4 billion and an equity value of approximately $6 billion, with COR planning to pay off $1.3 billion of OneOncology's existing corporate debt [10] - Funding for the acquisition will primarily come from new debt, with COR pausing share repurchases to maintain its investment-grade credit rating [9][11] Industry Outlook - The oncology market is projected to reach $225.01 billion by 2025, with a CAGR of 11.5% through 2034, driven by the increasing prevalence of cancer [13]

Earnings Reports - BP p.l.c. reported third-quarter adjusted earnings of 85 cents per American depositary share, exceeding the consensus estimate of 75 cents. However, total revenue increased to $48.42 billion from $47.25 billion year-over-year, falling short of analyst projections of $51.38 billion [1] - Perpetua Resources Corp. reported third-quarter losses of 24 cents per share, which missed the analyst consensus estimate of losses of 3 cents per share [3] Mergers and Acquisitions - Cencora, Inc. agreed to acquire the majority stake in OneOncology from TPG and other shareholders for approximately $3.6 billion, which includes retiring existing corporate debt of $1.3 billion, bringing the total consideration to approximately $5 billion [2] Stock Performance - Cencora shares increased by 1.3% to settle at $350.32 [4] - BP shares decreased by 0.03% to close at $35.25 [4] - Perpetua Resources shares fell by 6.9% to close at $26.84 [4]

Market Overview - The U.S. stock markets ended the week mostly lower, with the Nasdaq Composite and S&P 500 slipping by 1.49% and 0.28% respectively due to a sharp selloff in tech stocks [1] - The Dow Jones Industrial Average gained 1.51% as investors rotated toward value and traditional sectors [1] Federal Reserve Actions - The Federal Reserve cut its key overnight borrowing rate by a quarter-percentage-point, now in the range of 3.5% to 3.75% [2] - This decision was influenced by signs of gradually cooling inflation, aimed at supporting the labor market and stimulating economic growth [2] - The number of Americans filing new applications for unemployment benefits surged to a 4.5-year high of 236,000, indicating a sharp deterioration in the jobs market [2] Stock Performance and Recommendations - Liquidia Corporation (LQDA) shares gained 43.9% since being upgraded to Zacks Rank 2 (Buy) on October 13, outperforming the S&P 500's 4.4% increase [3][6] - The Bank of N.T. Butterfield & Son Limited (NTB) returned 22.7% since its upgrade to Zacks Rank 1 (Strong Buy) on October 7, compared to the S&P 500's 1.5% increase [4] - Western Digital Corporation (WDC) shares advanced 52.8% since its upgrade to Outperform on October 13, significantly beating the S&P 500's 4.4% increase [7] Portfolio Performance - A hypothetical portfolio of Zacks Rank 1 stocks returned +14.3% in 2025, slightly underperforming the S&P 500 index's +14.9% [11] - The Zacks Model Portfolio has outperformed the S&P index by more than 12 percentage points since 1988, with an annualized average return of +23.9% compared to +11.5% for the S&P 500 index [14] Sector-Specific Stocks - Cencora, Inc. (COR) and Fair Isaac Corporation (FICO) returned 18.7% and 18.6% respectively over the past 12 weeks [15] - Johnson & Johnson (JNJ) returned 19.3% over the past 12 weeks, benefiting from investor demand for quality dividend stocks [19]

U.S. drug distributor Cencora said on Monday it will take majority control of cancer care network OneOncology in a deal that values the business at $7.4 billion, as it moves to expand services for com... ...