Financial Data and Key Metrics Changes - The company reported a strong fiscal year 2025, with EPS and adjusted operating income both up 16% [4] - The stock price has compounded at 25% over the years, with a 55% increase recently [4] - For fiscal 2026, the company expects operating income growth of 8%-10% on a consolidated basis, with U.S. healthcare operating income growth projected at 9%-11% [5][6] - Long-term operating income guidance has been raised to 6%-9% growth, with EPS growth expectations adjusted to 9%-13% [4][7] Business Line Data and Key Metrics Changes - The company has seen strong pharmaceutical utilization trends and sales of specialty products, contributing to outsized growth [7][8] - The oncology market has been impacted by a competitor acquisition, which is expected to create a 1% headwind, but excluding this, U.S. operating income growth could reach 10%-12% [6][8] Market Data and Key Metrics Changes - The international healthcare solutions segment faced challenges, with 85% of operating income coming from the U.S. and only 15% from international operations [50] - The core distribution business internationally performed well, particularly in the 3PL market, which is the fastest-growing part of the distribution business [51] Company Strategy and Development Direction - The company is focusing on expanding its specialty business and MSO (Managed Service Organization) capabilities, particularly in oncology and retina [8][15] - The strategy includes providing additional management services to physician practices, enhancing operational efficiency [15] - The company aims to maintain a pharmaceutical-centric approach in all strategic moves [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth driven by pharmaceutical innovation and demographic trends [9] - There are concerns about potential policy-induced headwinds affecting coverage and insurance enrollment, but management believes pharmaceuticals will remain a critical and efficient form of care [11][12] - The company anticipates continued benefits from biosimilars and generic launches, which are expected to enhance operating income growth [28][30] Other Important Information - The company is committed to balanced capital deployment, with plans for $900 million in capital expenditures, strategic acquisitions, share repurchases, and a 9% increase in dividends [63][64] - The company is evaluating strategic alternatives for underperforming segments, including PharmaLex, while focusing on growth-oriented investments [56][61] Q&A Session Summary Question: What are the key growth drivers for the MSO business? - The MSO business is evolving through organic growth and acquisitions, with a focus on providing higher value services to physician practices [15][17] Question: How does the company view potential headwinds from drug pricing? - The company has historically advocated for community providers and aims to avoid unintended consequences from policy changes that could disrupt access to pharmaceuticals [24][25] Question: What is the impact of biosimilars on the company's revenue and profitability? - Biosimilars are expected to be a tailwind for distribution and GPO, with higher margins compared to brand products [27][28] Question: How is the company addressing challenges in the international market? - The company is focusing on its core distribution business, which has shown strength, while also addressing underperforming segments [50][51] Question: What is the company's approach to capital deployment? - The company prioritizes investments in infrastructure, strategic acquisitions, share repurchases, and dividend growth, maintaining a balanced approach to capital deployment [62][63]

Financial Data and Key Metrics Changes - The company reported a strong fiscal year 2025, with EPS and adjusted operating income both up 16% [4] - The stock price has compounded at 25% over the past several years, with a 55% increase recently [4] - Long-term operating income guidance has been raised to 6%-9% growth, with U.S. healthcare operating income growth expected at 9%-11% for 2026 [4][5] Business Line Data and Key Metrics Changes - The U.S. operating income growth is projected at 9%-11%, with a potential 10%-12% growth when excluding a 1% headwind from a competitor acquisition [5][6] - The specialty business continues to drive outsized growth, particularly in pharmaceutical utilization trends and sales of specialty products [7][8] Market Data and Key Metrics Changes - The international healthcare solutions segment saw weaker performance, with 85% of operating income coming from the U.S. and only 15% from international [50] - The 3PL market is identified as the fastest-growing part of the international distribution business, with improvements noted in the global specialty logistics business [51][53] Company Strategy and Development Direction - The company is focusing on expanding its MSO business, particularly in oncology and retina, to provide higher value services to physician practices [15] - A commitment to remain pharmaceutical-centric in all strategic moves, leveraging innovation in the pharmaceutical market and demographic trends for long-term growth [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth driven by pharmaceutical innovation and demographics, despite expecting normalization in growth rates post-fiscal 2026 [9][10] - The company is optimistic about the international business for fiscal year 2026, with a turnaround in the global specialty logistics business noted [51][53] Other Important Information - The company plans to invest approximately $900 million in capital expenditures for infrastructure and technology in the current year [62] - A balanced capital deployment strategy includes strategic acquisitions, opportunistic share repurchases, and a commitment to increasing dividends [63][64] Q&A Session Summary Question: What are the key growth drivers for the MSO business? - The MSO business is evolving through organic growth and acquisitions, with a focus on providing management services to physician practices [15][17] Question: How does the company view potential headwinds from drug pricing? - The company has historically advocated for community providers and believes that pharmaceuticals are the most efficient form of care, which should mitigate potential pricing headwinds [24][25] Question: What is the impact of biosimilars on the business? - Biosimilars are expected to benefit the company from a distribution and GPO standpoint, as they offer higher margins compared to brand-name drugs [27][28] Question: How is the relationship with Walgreens affected by its privatization? - The relationship remains strong, with contracts in place until 2029, and the company continues to work on improving operational efficiencies [42][43] Question: What actions are being taken regarding the PharmaLex business? - The company is focusing on the more attractive parts of PharmaLex, particularly in pharmacovigilance, market access, and regulatory affairs, while evaluating strategic alternatives for less competitive segments [56][57]

Financial Data and Key Metrics Changes - The company reported a strong fiscal year 2025, with EPS and adjusted operating income both up 16% [5] - The stock price increased by approximately 55% over the year [5] - Long-term operating income guidance was raised to 6%-9% growth, with a 2026 forecast for U.S. healthcare operating income growth of 9%-11% [6][7] Business Line Data and Key Metrics Changes - The U.S. operating income growth is expected to be 9%-11%, with a potential 10%-12% growth when excluding a 1% headwind from a competitor acquisition [7][8] - The company is focusing on expanding its specialty business, particularly in oncology and retina markets, which are seen as key growth drivers [8][15] Market Data and Key Metrics Changes - The international healthcare solutions segment faced challenges, contributing only 15% to overall operating income, while the U.S. segment accounted for 85% [49] - The 3PL market is identified as the fastest-growing part of the international distribution business, with improvements noted in the global specialty logistics business [50][52] Company Strategy and Development Direction - The company is committed to a pharmaceutical-centric approach, focusing on specialty products and management services for physician practices [8][15] - Strategic acquisitions, particularly in the MSO space, are a priority, with plans to acquire the remaining 65% of OneOncology [17][63] - The company is also investing in infrastructure and technology, with capital expenditures projected at about $900 million [62][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth driven by pharmaceutical innovation and demographic trends [9] - There are concerns about potential policy-induced headwinds affecting coverage and insurance enrollment, but management believes pharmaceuticals remain a critical and efficient form of care [10][12] Other Important Information - The company is evaluating strategic alternatives for underperforming segments, including parts of PharmaLex, while retaining growth-oriented businesses [56][60] - The dividend growth rate was increased to 9%, aligning with long-term EPS growth guidance of 9%-13% [63] Q&A Session Summary Question: What are the key growth drivers for the MSO business? - The MSO business is seen as a natural evolution of the specialty business, providing additional management services to physician practices [14][15] Question: How does the company differentiate itself from competitors in the MSO space? - The company maintains a pharmaceutical-centric focus, which is a key differentiator in its strategy [15] Question: What impact do potential drug pricing changes have on the business? - Management emphasized the importance of community-based providers and the efficiency of pharmaceuticals in maintaining care access [25][26] Question: How is the company addressing challenges in the international market? - The company is focusing on the 3PL market and has seen improvements in its global specialty logistics business [50][52] Question: What is the company's approach to capital deployment? - The company prioritizes balanced capital deployment, including investments in business growth, strategic acquisitions, share repurchases, and dividend payments [62][63]

Core Viewpoint - Cencora (COR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which are crucial for stock price movements [1][2][4]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, influencing their buying and selling decisions, which in turn affects stock prices [3]. Cencora's Earnings Outlook - For the fiscal year ending September 2026, Cencora is expected to earn $17.66 per share, consistent with the previous year's figure, while the Zacks Consensus Estimate has increased by 1.1% over the past three months [7]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6][8]. - Cencora's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Summary of Cencora (NYSE:COR) FY Conference Call - December 02, 2025 Company Overview - **Company**: Cencora - **Industry**: Healthcare Services, specifically focusing on pharmaceutical distribution and management services organizations (MSOs) Key Points and Arguments Financial Performance and Guidance - Cencora reported strong fourth-quarter results for fiscal year 2025, with guidance for fiscal year 2026 indicating 9%-11% operating income growth in the US segment [4][22] - Long-term guidance has been increased, reflecting confidence in the specialty market's growth [4][5] Acquisition Strategy - The acquisition of OneOncology is highlighted as a significant growth driver, with Cencora currently owning 35% and looking to acquire the remaining 65% [6][7] - The acquisition is expected to enhance operating income and create synergies between OneOncology and RCA, particularly in clinical trials [7][8] Specialty Market Focus - Cencora's strength lies in its leadership position in the specialty market, benefiting from sales to specialty physician practices and health systems [5][14] - The company is pursuing both organic and inorganic growth opportunities in oncology and retina markets, with a focus on acquiring smaller practices [15][16] Capital Deployment - Projected free cash flow of $15 billion-$20 billion by the end of the decade will be strategically deployed, with a significant portion earmarked for the acquisition of OneOncology [21][22] - Cencora plans to invest approximately $900 million in capital expenditures, primarily in infrastructure for its specialty business [21] International Segment Performance - The international segment, which includes Alliance and World Courier, is a significant contributor to operating income, with Alliance being the largest revenue source [24][27] - World Courier is expected to stabilize and grow as clinical trial activities pick up [29][30] Regulatory Environment and Drug Pricing - The company is actively engaging in discussions regarding the impact of regulatory changes, particularly around the Physician Fee Schedule and drug pricing negotiations under the IRA [33][41] - Cencora emphasizes the importance of maintaining access to pharmaceuticals and affordability for patients [46] Growth Drivers and Market Trends - Cencora anticipates a wave of generic launches and biosimilars, which will positively impact revenue, although the profit margins may differ from previous years due to contract rebalancing [54][57] - The company is focused on digital transformation and productivity improvements as part of its long-term strategy [76][79] Conclusion - Cencora is positioned for continued growth through strategic acquisitions, a strong focus on the specialty market, and effective capital deployment. The company aims to enhance its operational efficiency and maintain a strong value proposition in the healthcare supply chain [76][79]

Acquisition and Investments - Cencora acquired an 85% interest in Retina Consultants of America for $4,042.0 million in cash, with additional contingent considerations totaling $1,633.2 million[33] - The company invested $718.4 million for a 34.9% interest in a joint venture to acquire OneOncology in June 2023, and acquired RCA, a management services organization, on January 2, 2025[83] - The acquisition of RCA and investments in other businesses may lead to integration challenges and unanticipated liabilities[84] Revenue and Growth - The U.S. Healthcare Solutions segment accounted for approximately 66% of revenue in fiscal 2025, with Walgreens and Boots contributing about 25% and Evernorth Health Services about 13%[42] - Revenue increased by $27.4 billion, or 9.3%, from the prior fiscal year, driven by growth in both U.S. and International Healthcare Solutions segments[209] - U.S. Healthcare Solutions segment revenue grew by $25.6 billion, or 9.7%, primarily due to increased sales of specialty products and GLP-1 products, which saw a sales increase of $7.7 billion, or 26.9%[210] - International Healthcare Solutions revenue increased by $1.7 billion, or 6.1%, mainly due to a $1.3 billion increase in sales at the European distribution business[211] Operational Efficiency - The company aims to optimize and grow its U.S. Healthcare Solutions businesses by improving operating and capital efficiencies[26] - The company continues to invest in advanced information systems and automated warehouse technology to enhance operational efficiency[47] - U.S. Healthcare Solutions has made significant investments in electronic ordering systems to strengthen customer relationships and reduce operating costs[48] - The company processes a substantial portion of its purchase orders and payments electronically, improving productivity and operating leverage[49] Customer Concentration - The top 10 customers represented approximately 66% of revenue in fiscal 2025, indicating a concentrated customer base[42] - Walgreens and Boots accounted for approximately 25% of the company's revenue in fiscal 2025 and about 38% of accounts receivable as of September 30, 2025[78] - Evernorth Health Services contributed approximately 13% to the company's revenue in fiscal 2025[78] Cybersecurity and Information Security - The company continues to invest in cybersecurity capabilities to enhance its cyber resiliency[45] - The company faces increasing information security risks due to evolving cyber threats, with incidents like ransomware attacks becoming more prevalent and severe[97] - Cybersecurity incidents have previously occurred, with notable incidents disclosed in February 2024 and March 2023, although they did not have a material adverse impact on the company[98] - The company has a Cybersecurity Incident Response Process that outlines actions to be taken in response to cybersecurity incidents, ensuring appropriate escalation to senior management and the Board[163] - The company has invested in cybersecurity training for employees, requiring periodic access-based and role-based training to mitigate risks[164] Regulatory and Legal Risks - The company is subject to various federal, state, and local environmental laws, which could significantly impact its financial position and operations[70] - The company faces significant challenges in achieving anticipated benefits from its agreements with Walgreens and Boots, including potential delays and changes in supplier relationships[80] - Legal and regulatory changes regarding coverage, reimbursement, and pricing could adversely affect the company’s business and results of operations[118] - The company is facing ongoing investigations and lawsuits related to opioid distribution, which could adversely affect its financial position and operations[139] Financial Performance - Gross profit increased by $1,568.5 million, or 15.8%, primarily due to higher gross profit in the U.S. Healthcare Solutions segment and gains from antitrust litigation settlements[214] - U.S. Healthcare Solutions' gross profit rose by $1,482.3 million, or 23.1%, with a gross profit margin of 2.72%, an increase of 30 basis points compared to the prior fiscal year[215] - Total operating expenses increased by $1,115.2 million, or 14.4%, primarily due to the acquisition of RCA and increased acquisition-related expenses[214] Employee and Labor Relations - The company has over 51,000 employees globally, with approximately 47,000 being full-time employees[56] - Approximately 24% of the company's global employees are covered by collective bargaining agreements, mostly outside the U.S.[57] - Approximately 24% of the company's employees are covered by collective bargaining agreements, which could lead to operational disruptions if strikes occur[95] Market and Economic Factors - Pharmaceutical sales in the U.S. are projected to grow at a compound annual growth rate of approximately 8.4% from 2024 through 2029[20] - Generic pharmaceuticals currently represent approximately 90% of the prescription volume in the U.S., providing higher gross profit margin opportunities[22] - Geopolitical risks, including tariffs and inflation, could adversely impact the company's financial position and operational costs[90] Stock and Shareholder Information - The company's common stock is traded on the New York Stock Exchange under the symbol "COR," with 2,166 record holders as of October 31, 2025[188] - The company approved quarterly dividend increases, with the latest increase in November 2025 to $0.600 per share, representing a 9% increase from the previous rate[188] - The company authorized a share repurchase program of up to $2.0 billion, with $882.2 million available as of September 30, 2025, after purchasing 1.9 million shares for $435.4 million during fiscal 2025[192]

Market Performance - Major U.S. indexes showed mixed performance last week, with the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average declining by 2.7%, 1.4%, and 0.5% respectively [1] - Investors are shifting focus from high-valuation technology and AI stocks to more defensive sectors due to market volatility [1] Federal Reserve and Economic Data - The end of a 43-day government standoff has reduced political risks, but delays in key economic data releases have created uncertainty for the Federal Reserve and investors [2] - The Fed is balancing economic growth and inflation, with inflation remaining above the 2% target and a resilient labor market casting doubt on December rate cut expectations [2] Zacks Research Performance - Zacks Research has provided guidance that led to significant stock performance, with Macy's shares increasing by 14.9% since its upgrade to Zacks Rank 1 on September 18, outperforming the S&P 500's 2.2% increase [3][4] - Fresnillo plc also saw a 7.2% return since its upgrade to Zacks Rank 1 on September 19, compared to the S&P 500's 1.8% increase [4] Zacks Model Portfolio Returns - A hypothetical portfolio of Zacks Rank 1 stocks returned +8.64% in 2025 through September 1, outperforming the S&P 500's +7.60% [4] - The Zacks Model Portfolio has outperformed the S&P 500 index by over 12 percentage points since 1988, with an annualized average return of +23.8% compared to +11.3% for the S&P 500 [5] Specific Stock Performances - United Natural Foods, Inc. (UNFI) shares increased by 32.4% after its Zacks Recommendation was upgraded to Outperform [7] - Caterpillar Inc. (CAT) gained 35.9% over the past 12 weeks, while CACI International Inc. (CACI) returned 20.1% during the same period [10] Earnings Certain Admiral Portfolio (ECAP) - The ECAP returned -1.30% in Q3 2025, underperforming the S&P 500's +8.1% gain, and +2.72% year-to-date compared to the S&P 500's +14.84% [15] - The portfolio aims to minimize capital loss by holding shares of companies with a proven track record of earnings stability [16] Earnings Certain Dividend Portfolio (ECDP) - Johnson & Johnson (JNJ) returned 10.9% over the past 12 weeks, while UnitedHealth Group (UNH) increased by 5.9% [18] - The ECDP returned -0.01% in Q3 2025, underperforming the S&P 500's +8.1% gain [20] Top 10 Stock Portfolio - MasTec, Inc. (MTZ) has jumped 41.2% year-to-date, outperforming the S&P 500's 14.7% increase [22] - The Top 10 portfolio has produced a cumulative return of +2,553.1% since 2012, significantly outperforming the S&P 500's +545.2% [24]

Core Insights - BD (Becton, Dickinson and Company) has received WHO prequalification for its Onclarity™ HPV Assay, enhancing access to cervical cancer screening in low- and middle-income countries [1][4]. Product Details - The BD Onclarity™ HPV Assay detects 14 high-risk HPV types, allowing for individual identification of six high-risk types and three genotype groups, which aids in risk stratification and patient management [2][3]. - The assay is approved for self-collection, including at-home self-collection in countries recognizing the CE mark, thus improving access in resource-limited settings [2][4]. Impact on Healthcare - The ability to identify more individual HPV types enables clinicians to manage high-risk cases more effectively and guide follow-up for low-risk patients, ensuring appropriate care and reducing resource demand [3][4]. - WHO emphasizes the importance of regular screening to prevent cervical cancer, which is the fourth most common cancer in women globally, with a woman dying from it every 90 seconds [7]. System Features - The BD Viper™ LT System is designed for decentralized testing, featuring a compact design that automates sample preparation and amplification, making it suitable for labs with limited infrastructure [5]. - The BD COR™ System offers high-throughput automation for centralized labs, capable of processing nearly 1,650 tests and delivering up to 1,000 results in 24 hours, maximizing efficiency [6].

Cencora ( COR ) hasn’t received much coverage since early August, despite its growing relevance and strong fundamentals. The company remains largely overlooked by investors, yet I view it as one of the most attractive names in theHi there! I’m Narek, and I’ve been in the investment world for over six years. I started out as an equity analyst at European banks, digging into reports and learning how to spot value in the markets. I’ve worked across sectors — from telecom to industry — and found that behind eve ...