Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies and confidence, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to complement the Zacks Rank, providing ratings based on value, growth, and momentum methodologies to help investors identify stocks likely to outperform the market [2] Zacks Style Scores Overview - Each stock is rated from A to F based on value, growth, and momentum, with A being the highest score indicating a better chance of outperforming [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score identifies attractive and discounted stocks using various financial ratios such as P/E, PEG, and Price/Sales, appealing to value investors [3] Growth Score - The Growth Score emphasizes a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [4] Momentum Score - The Momentum Score helps investors capitalize on price trends by analyzing short-term price changes and earnings estimate revisions [5] VGM Score - The VGM Score combines the three Style Scores to identify stocks with the best value, growth potential, and momentum, serving as a strong indicator alongside the Zacks Rank [6] Zacks Rank and Style Scores Interaction - The Zacks Rank utilizes earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [7][8] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] Company Spotlight: Cencora - Cencora, based in Chesterbrook, PA, is a leading pharmaceutical services company focused on drug distribution and healthcare cost reduction [11] - Cencora holds a Zacks Rank of 2 (Buy) and a VGM Score of A, with a Value Style Score of A due to a forward P/E ratio of 17.67, making it attractive for value investors [11] - Recent analyst revisions have increased Cencora's earnings estimate for fiscal 2025 by $0.27 to $15.36 per share, with an average earnings surprise of 4.9% [12]

Core Viewpoint - The article highlights Cencora (COR) as a promising growth stock, supported by its favorable Growth Score and Zacks Rank, indicating strong potential for outperformance in the market [2][10]. Earnings Growth - Cencora has a historical EPS growth rate of 14.7%, with projected EPS growth of 11.6% for the current year, surpassing the industry average of 8.6% [5][4]. Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 12.9%, significantly higher than the industry average of -9%. Its annualized cash flow growth rate over the past 3-5 years stands at 14.1%, compared to the industry average of 9.7% [6][7]. Earnings Estimate Revisions - The current-year earnings estimates for Cencora have been revised upward, with the Zacks Consensus Estimate increasing by 0.2% over the past month, indicating a positive trend in earnings estimate revisions [8]. Overall Positioning - Cencora holds a Growth Score of B and a Zacks Rank of 2, positioning it well for potential outperformance, making it an attractive option for growth investors [10].

Core Viewpoint - Cencora's recent earnings report shows a mixed performance with adjusted earnings per share beating estimates, while GAAP earnings per share declined significantly due to prior year credits related to litigation expenses [2][3]. Financial Performance - Adjusted earnings per share for Q1 fiscal 2025 was $3.73, exceeding the Zacks Consensus Estimate of $3.50 by 6.6% and improving 13.7% year over year [2]. - GAAP earnings per share was reported at $2.50, down 16.1% from the previous year [2]. - Total revenues reached $81.49 billion, reflecting a year-over-year increase of 12.8% and surpassing the Zacks Consensus Estimate by 4.3% [4]. Segment Analysis - **U.S. Healthcare Solutions**: Revenues were $74 billion, up 13.6% year over year, driven by market growth and increased sales of GLP-1 drugs and specialty products [5]. - **International Healthcare Solutions**: Revenues amounted to $7.5 billion, a 5.5% increase year over year, with operating income at $182.1 million, down 2.9% on a reported basis [7]. Margin Analysis - Adjusted gross profit was $2.5 billion, up 6.1% year over year, with an adjusted gross margin of 3.1%, down 20 basis points from the previous year [8]. - Adjusted operating income was $949.3 million, up 7.2% year over year, with an adjusted operating margin of 1.2%, contracting 7 basis points from the prior year [8]. Financial Update - Cash and cash equivalents at the end of Q1 were $3.22 billion, an increase from $3.13 billion in the previous quarter [9]. - Cumulative net cash used in operating activities was $2.72 billion, compared to $885.2 million in net cash provided a year ago [10]. Dividend Update - Cencora's board declared a quarterly dividend of 55 cents per share, payable on March 3, 2025, to shareholders of record on February 14, 2025 [11]. FY25 Guidance - The company updated its fiscal 2025 earnings and revenue outlook, projecting adjusted earnings per share in the range of $15.15-$15.45, indicating growth of 8-10% from the prior year [12]. - Revenue growth is now expected to be 8-10%, up from the previous guidance of 7-9% [13]. - Adjusted operating income is anticipated to improve by 11.5-13.5%, an increase from the earlier guidance of 5-6.5% [13]. Market Position - Cencora has a Zacks Rank 2 (Buy) and is expected to deliver above-average returns in the coming months despite a recent downward trend in estimates [17].

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Cencora (COR) is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 14.7%, with projected EPS growth of 11.1% this year, surpassing the industry average of 11% [4] Group 2: Financial Metrics - Cencora's year-over-year cash flow growth stands at 12.9%, significantly higher than the industry average of -10.5% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 14.1%, compared to the industry average of 13.4% [6] Group 3: Earnings Estimates - There is a positive trend in earnings estimate revisions for Cencora, with the current-year earnings estimates increasing by 0.3% over the past month [7] - Cencora has achieved a Growth Score of B and a Zacks Rank of 2, indicating strong potential for outperformance [9]

iREIT+HOYA Capital is the premier income-focused investing service on Seeking Alpha. Our focus is on income-producing asset classes that offer the opportunity for sustainable portfolio income , diversification , and inflation hedging . Get started with a Free Two-Week Trial and take a look at our top ideas across our exclusive income-focused portfolios.There’s value to be had in buying boring businesses that deliver shareholder returns year in and out. Such companies may not be household names like NVIDIA C ...

Core Viewpoint - Walgreens Boots Alliance has sold additional shares of drug distributor Cencora for approximately $300 million, primarily aimed at debt reduction and general corporate purposes [1] Group 1: Financial Actions - The stock sale reduces Walgreens' stake in Cencora from 10% to 6% [2] - This sale follows the suspension of quarterly dividend payments to stockholders for the first time in nearly a century, as the company seeks to free up cash for a broader long-term turnaround [3] - Walgreens has been reducing its stake in Cencora and other businesses over the past four years to raise funds for priorities such as establishing a new specialty pharmacy business and enhancing healthcare services in its stores [4] Group 2: Transaction Details - The announcement included the sale of 1.3 million shares of Cencora, which were pledged under prepaid variable share forward transactions, resulting in approximately $300 million from the early settlement and concurrent sale of shares [5] - The proceeds from these transactions, along with the recent suspension of the dividend, are intended to help the company address upcoming debt maturities in fiscal 2026 [5] Group 3: Strategic Relationship - Despite the reduction in stake, Walgreens maintains that the sale does not affect the long-term partnership with Cencora, which has been a trusted partner since 2013 [5] - The Chief Operating Officer, International of Walgreens Boots Alliance, Ornella Barra, will continue to serve on Cencora's Board of Directors [5]

Revenue Growth - Revenue increased by $9.2 billion, or 12.8%, from the prior year quarter, primarily due to growth in the U.S. Healthcare Solutions segment [90]. - U.S. Healthcare Solutions segment revenue grew by $8.8 billion, or 13.6%, driven by unit volume growth, including a $3.2 billion increase, or 53.0%, in sales of GLP-1 products [93]. - International Healthcare Solutions revenue increased by $0.4 billion, or 5.5%, primarily due to increased sales of $0.3 billion in Europe and $0.1 billion in Canada [94]. Profit and Operating Income - Gross profit increased by $89.2 million, or 3.6%, from the prior year quarter, with U.S. Healthcare Solutions gross profit rising by $113.8 million, or 7.2% [90]. - Total segment operating income increased by $63.6 million, or 7.2%, with U.S. Healthcare Solutions operating income up by $69.2 million, or 9.9% [90]. - U.S. Healthcare Solutions' operating income increased by $69.2 million, or 9.9%, to $767.3 million, while International Healthcare Solutions' operating income decreased by $5.5 million, or 2.9%, to $182.1 million [108][109]. - Total segment operating income rose to $949.3 million, a 7.2% increase from the previous year [108]. - Operating income decreased by $116.6 million, or 14.2%, to $706.3 million due to increased operating expenses and litigation-related costs [108]. Expenses - Total operating expenses increased by $205.8 million, or 12.5%, primarily due to litigation and opioid-related expenses [90]. - Distribution, selling, and administrative expenses increased by $73.3 million, or 5.2%, compared to the prior year quarter [103]. - Restructuring and other expenses totaled $45.8 million, reflecting workforce reductions and business transformation efforts [106]. Tax and Liabilities - The effective tax rate for the three months ended December 31, 2024, was 20.4%, lower than the 23.0% rate for the same period in 2023 [90]. - The effective tax rate decreased to 20.4% from 23.0% year-over-year, primarily due to benefits from income taxed at lower rates [112]. - The accrued litigation liability related to the Distributor Settlement Agreement is $4.8 billion, expected to be paid over the next 14 years, with $509.3 million anticipated to be paid before December 31, 2025 [139]. - The company has a liability for uncertain tax positions of $553.2 million as of December 31, 2024, primarily related to litigation concerning prescription opioid distribution [141]. Cash Flow and Financing - Cash used in operations was $2.7 billion, a decrease of $3.6 billion compared to the previous year, primarily due to increased accounts receivable and inventories [118]. - Net cash provided by financing activities included $2.0 billion of net borrowings under revolving credit facilities and $1.8 billion from senior notes issuance [124]. - Total debt as of December 31, 2024, was $8.1 billion, with $2.4 billion available under the multi-currency revolving credit facility [127]. - The company has a $1,450 million receivables securitization facility, expiring in October 2027, with a potential increase of up to $250 million for seasonal needs [129]. - As of December 31, 2024, there were $350 million of borrowings outstanding under the receivables securitization facility, with none outstanding as of September 30, 2024 [130]. - In November 2024, the company obtained a $1.5 billion senior unsecured term facility to finance a portion of the acquisition of RCA, maturing in three years [131]. - The company issued $500 million of 4.625% senior notes due in December 2027, $600 million of 4.850% senior notes due in December 2029, and $700 million of 5.150% senior notes due in February 2035 [134]. - The company had $2.1 billion of variable-rate debt outstanding as of December 31, 2024, managing interest rate risk through a combination of fixed-rate and variable-rate debt [143]. Capital Expenditures and Investments - Capital expenditures increased to $105.9 million from $74.2 million, with significant investments in distribution network expansion and technology initiatives [122]. - The company expects to invest approximately $600 million in capital expenditures during fiscal 2025 [123]. Shareholder Returns - The company authorized a share repurchase program of up to $2.0 billion, with $385.4 million of common stock purchased in the three months ended December 31, 2024 [137]. - The quarterly dividend was increased by 8% from $0.51 to $0.55 per share, with future dividends dependent on earnings and financial condition [138]. Foreign Operations - Revenue from foreign operations during the three months ended December 31, 2024, was approximately 9% of consolidated revenue [142].

Core Viewpoint - Cencora, Inc. reported strong first-quarter fiscal 2025 results, with adjusted earnings per share (EPS) exceeding estimates and revenue growth driven by U.S. Healthcare Solutions and specialty products [1][3][14]. Financial Performance - Adjusted EPS for Q1 fiscal 2025 was $3.73, beating the Zacks Consensus Estimate of $3.50 by 6.6% and improving 13.7% year over year [1]. - GAAP EPS was $2.50, down 16.1% from the previous year, primarily due to the absence of a $78.9 million credit related to litigation and opioid expenses recorded in the prior quarter [1]. - Total revenues reached $81.49 billion, reflecting a 12.8% year-over-year increase and surpassing the Zacks Consensus Estimate by 4.3% [3]. Segmental Analysis - **U.S. Healthcare Solutions**: Revenues totaled $74 billion, up 13.6% year over year, driven by increased unit volume and sales of GLP-1 drugs and specialty products [4]. - **International Healthcare Solutions**: Revenues amounted to $7.5 billion, a 5.5% year-over-year increase, with operating income at $182.1 million, down 2.9% on a reported basis but up 3.3% at constant currency [6]. Margin Analysis - Adjusted gross profit was $2.5 billion, up 6.1% year over year, with an adjusted gross margin of 3.1%, down 20 basis points from the previous year [7]. - Adjusted operating income was $949.3 million, up 7.2% year over year, with an adjusted operating margin of 1.2%, contracting 7 basis points from the year-ago quarter [7]. Financial Update - Cencora ended the fiscal first quarter with cash and cash equivalents of $3.22 billion, an increase from $3.13 billion in the previous quarter [8]. - Cumulative net cash used in operating activities was $2.72 billion, compared to $885.2 million in net cash provided by operating activities a year ago [8]. Dividend Update - The board declared a quarterly dividend of 55 cents per share, payable on March 3, 2025, to shareholders of record as of February 14, 2025 [10]. FY25 Guidance - The company updated its fiscal 2025 earnings and revenue outlook, projecting adjusted EPS in the range of $15.15-$15.45, indicating growth of 8-10% from the prior year [11]. - Revenue growth is now expected to be 8-10%, up from the previous guidance of 7-9%, with U.S. Healthcare Solutions projected to grow 9-11% [12]. - Adjusted operating income is anticipated to improve by 11.5-13.5%, up from earlier guidance of 5-6.5% [12][13]. Market Performance - Following the robust quarterly results, Cencora's shares increased by 0.8%, with a 4.9% gain over the past six months, contrasting with a 12.8% decline in the industry [14].

Financial Data and Key Metrics Changes - Cencora reported a revenue growth of 13% in Q1 2025, reaching $81.5 billion, primarily driven by strong performance in the U.S. healthcare solutions segment [22][8] - Adjusted diluted EPS increased by 14% to $3.73, prompting the company to raise its full-year adjusted diluted EPS guidance to a range of $15.25 to $15.55 [21][32] - Consolidated gross profit was $2.5 billion, up 6%, with a gross profit margin of 3.11%, a decrease of 20 basis points due to increased sales of low-margin GLP-1 products [23][24] Business Line Data and Key Metrics Changes - U.S. healthcare solutions segment revenue was $74 billion, up 14%, with GLP-1 product sales increasing by 53% year-over-year [26][27] - International healthcare solutions segment revenue was $7.5 billion, up approximately 6% on an as-reported basis and nearly 9% on a constant currency basis [28] Market Data and Key Metrics Changes - The company experienced strong prescription utilization trends in the U.S. healthcare solutions segment, contributing to overall revenue growth [21][26] - The international healthcare solutions segment's operating income was $182 million, down 3% on an as-reported basis, but up 3% on a constant currency basis [28] Company Strategy and Development Direction - Cencora is focused on advancing its leadership in specialty healthcare, enhancing efficiency through technology, and maintaining a customer-centric approach [10][15] - The acquisition of Retina Consultants of America (RCA) is part of the strategy to expand leadership in specialty healthcare and support community providers [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on positive industry trends and innovation, with a focus on driving value for stakeholders [19][39] - The company anticipates a challenging second quarter due to COVID-19 vaccine headwinds and expects to see improved performance in the international segment later in fiscal 2025 [38][62] Other Important Information - The company used $2.7 billion in cash during the quarter, resulting in negative adjusted free cash flow of $2.8 billion, but expects full-year adjusted free cash flow to be in the range of $2 billion to $3 billion [25][30] - Cencora's capital allocation strategy prioritizes deleveraging following the RCA acquisition [25] Q&A Session Summary Question: Strategic positioning in specialty business - Management emphasized a pharmaceutical-centered strategy and the importance of a strong customer portfolio to drive growth in specialty healthcare [44][46] Question: Revenue guidance and potential deceleration - Management noted that the revenue growth guidance reflects assumptions about GLP-1 growth and the impact of Humira's conversion to biosimilars [52][54] Question: World Courier business performance - Management acknowledged a challenging quarter for the World Courier business due to subdued clinical trial activity but expects improvement later in fiscal 2025 [61][62] Question: Update on Walgreens contract discussions - Management confirmed ongoing engagement with Walgreens to create value and that guidance includes assumptions regarding the contract [71][73] Question: MSO business challenges and physician enablement - Management highlighted the importance of physician leadership and value creation in the MSO model [77][79] Question: Competitive environment in ophthalmology MSO space - Management expressed confidence in RCA's leadership position and the ability to attract physicians and practices [83][84] Question: Guidance revision for U.S. business on an organic basis - Management indicated that the U.S. segment's performance is above initial guidance, driven by strong utilization trends [88] Question: COVID headwind impact - Management confirmed that the COVID-related headwind was as expected, with no significant contribution from exclusive COVID therapies in the current year [120]

For the quarter ended December 2024, Cencora (COR) reported revenue of $81.49 billion, up 12.8% over the same period last year. EPS came in at $3.73, compared to $3.28 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $78.12 billion, representing a surprise of +4.31%. The company delivered an EPS surprise of +6.57%, with the consensus EPS estimate being $3.50.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ex ...