Cencora Rallies 19.7% Year to Date: What's Driving the Stock?

Core Viewpoint - Cencora, Inc. (COR) has demonstrated strong momentum in the year-to-date period, with shares increasing by 19.7%, outperforming the industry which declined by 8.9% [1] Company Overview - Cencora, based in Chesterbrook, PA, is one of the largest pharmaceutical service companies globally, focusing on drug distribution and related services to lower healthcare costs and enhance patient outcomes [2] Growth Factors - The increase in Cencora's share price is attributed to robust growth in its U.S. Healthcare Solutions segment, driven by a solid fourth-quarter fiscal 2024 performance and strong business potential [4] - The company reported strong earnings and revenues that exceeded the Zacks Consensus Estimate in the fourth quarter of fiscal 2024, with growth across all markets and high demand for specialty products and GLP-1 drugs [5] - Cencora has entered a definitive agreement to acquire Retina Consultants of America, which is expected to enhance its presence in the retina treatment sector [6] Financial Estimates - For fiscal 2025, adjusted earnings per share (EPS) are projected to be between $14.80 and $15.10, reflecting an 8-10% growth from the previous year, with revenues expected to rise by 7-9% [7] - The U.S. Healthcare Solutions segment and International Healthcare Solutions business are also anticipated to see revenue increases of 7-9% [7] - Adjusted operating income is expected to improve by 5-6.5% [7] Market Position - Cencora is positioned as an ideal partner for manufacturers launching products due to its extensive global distribution network and commercialization services [8] - The company's growing presence in the pharmaceutical industry allows it to establish early-stage partnerships with pharmaceutical companies, enhancing its role in successful product commercialization [9] Earnings Projections - Earnings per share for fiscal 2025 and 2026 are projected to grow by 8.1% and 9.5%, respectively, reaching $14.88 and $16.209 year-over-year [11] - Revenues for fiscal 2025 and 2026 are expected to increase by 7.3% and 6.7%, respectively, to $315.26 billion and $336.52 billion year-over-year [11]