Company Overview - Henry Schein is the largest distributor of health care products and services to office-based practitioners in North America and Europe [1]. Leadership - The presentation features key executives from Henry Schein, including Chairman and CEO Stanley Bergman, CFO Ron South, CEO of Global Distribution and Technologies Andrea Albertini, and CEO of Henry Schein Products Group Tom Popeck [2]. Conference Context - This marks the 22nd or 23rd conference that the CEO Stanley Bergman has participated in with the senior medical technology analyst at Baird, indicating a long-standing relationship and ongoing dialogue [2].

Group 1 - Cardinal Health is highlighted as a top investment idea for 2025 by the research analyst Eric Coldwell [1] - The presentation features key executives from Cardinal Health, including CEO Jason Hollar and CFO Aaron Alt [1] - The discussion emphasizes the positive relationship and collaboration between the research analyst and Cardinal Health [2][3] Group 2 - Forward-looking statements will be made during the presentation, which are subject to risks and uncertainties [4] - The company encourages reviewing SEC filings for a detailed description of factors that could affect actual results [4]

Presentation Eric ColdwellSenior Research Analyst Good to go. Great. Good morning, everyone. My name is Eric Coldwell. I cover pharma services, health care distribution and related industries for Baird. And it's a great pleasure to have Cardinal Health with us here today. On stage with me, Jason Hollar, CEO; Aaron Alt, CFO; and of course, Matt Sims, who leads up Investor Relations. And we're very excited to have Cardinal. This has been a lot of fun for the last few years since you joined. And officially, ...

Summary of Henry Schein 2025 Conference Call Company Overview - **Company**: Henry Schein (NasdaqGS:HSIC) - **Industry**: Healthcare products and services distribution, specifically dental and medical sectors - **Key Executives Present**: Stanley Bergman (Chairman and CEO), Ron South (CFO), Andrea Albertini (CEO of Global Distribution and Technologies), Tom Popeck (CEO of Henry Schein Products Group) [1][5][6] Core Points and Arguments - **Company Performance**: Henry Schein is in good shape, with high growth and high margin products contributing nearly 60% of operating income [5] - **Cyber Incident Recovery**: The company has largely recovered from a cyber incident that occurred in October 2023 [5] - **Historical Growth**: Transitioned from a catalog company with $200 million in revenue to $13 billion overall, with $8 billion in dental revenue [6] - **Customer Base**: Serves over a million customers globally, focusing on operational efficiency and clinical care [9] - **Market Stability**: The dental market is stable, with signs of recovery in Europe and a bounce back in the U.S. after tariff-related uncertainties [13][15] - **Technology Adoption**: Continued adoption of technology is seen as a tailwind for growth, especially in improving practice efficiency [15] Specialty Business Insights - **Specialty Demand**: The specialty business, particularly in dental implants and endodontics, is growing faster than the general business, with strong performance noted in Europe and Latin America [19] - **Endodontics Resilience**: The endodontic segment remained stable during COVID-19, as it involves urgent care [19] Pricing and Tariff Strategies - **Price Increase Mitigation**: The company is working with suppliers to mitigate the impact of tariffs rather than automatically passing price increases to customers [20][23] - **Cost Management**: Strategies are in place to manage costs effectively, with some price increases already implemented in certain product categories [23] Future Guidance and Growth Projections - **2026 Growth Expectations**: The company aims for upper single to low double-digit growth rates, with 2025 serving as a baseline year [30][34] - **Value Creation Projects**: Initiatives are underway to optimize gross profit and operational efficiency, with expected benefits starting in 2026 [34][40] Leadership Transition - **CEO Transition**: Stanley Bergman will transition to Chairman of the Board at the end of the year, with a focus on finding a successor who understands the complexities of the healthcare distribution business [52][54] Innovation and R&D Concerns - **Need for Innovation**: There is a concern regarding the lack of new product innovation in the dental market, with a call for more R&D from manufacturing partners [70][72] - **Technology Focus**: Emphasis on leveraging technology, particularly AI, to drive operational efficiency and clinical optimization [72] Financial Updates - **Share Repurchase Authorization**: A new $750 million share repurchase authorization was announced, providing flexibility for capital allocation [83][87] Additional Insights - **Supplier Relationships**: Overall good relationships with suppliers, though there are concerns about innovation and the need for new products [65][70] - **Market Demand**: There is a strong demand for dental services, with a focus on improving efficiency and cost of care through innovative materials and technologies [81][82]

Market Overview - Recent market pullback due to new tariffs and a slowdown in job growth has shaken investor confidence, with July nonfarm payrolls rising by only 73,000, significantly below expectations [1] - June's job numbers were revised downward, indicating a weaker labor market than previously thought [1] - Renewed trade tensions have fueled expectations of a Federal Reserve rate cut and increased risk aversion, leading to sharp declines in major indices [1] Importance of Financial Health - Investors should not rely solely on stock price movements; understanding a company's fundamentals is crucial for informed decision-making in an unpredictable market [2] - Sales and earnings metrics can be misleading; the interest coverage ratio is a key indicator of a company's ability to meet financial obligations [3][4] Interest Coverage Ratio - The interest coverage ratio measures how effectively a company can pay interest on its debt, calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5] - A higher interest coverage ratio indicates a greater ability to meet financial commitments, while a ratio below 1 suggests potential default risks [6][7] - Companies with strong interest coverage ratios include The Walt Disney Company, BJ's Wholesale Club, Ralph Lauren, and McKesson Corporation, all of which demonstrate solid debt-servicing capabilities [9][11] Investment Strategy - A favorable investment strategy includes selecting stocks with an interest coverage ratio above the industry average, a Zacks Rank of 1 or 2, and a VGM Score of A or B [8][10] - The selected companies have shown strong earnings surprises and are projected to grow sales and earnings in the coming year [9][11] Company Performance Highlights - **Walt Disney Company**: Zacks Rank 2, VGM Score B, with a trailing four-quarter earnings surprise of 16.4% and projected sales and EPS growth of 4% and 16.3% respectively [12] - **BJ's Wholesale Club**: Zacks Rank 2, VGM Score B, trailing four-quarter earnings surprise of 17.7%, with projected sales and EPS growth of 5.5% and 6.2% respectively [13] - **Ralph Lauren**: Zacks Rank 2, VGM Score B, trailing four-quarter earnings surprise of 9%, with projected sales and EPS growth of 3.8% and 11.8% respectively [14] - **McKesson Corporation**: Zacks Rank 2, VGM Score A, trailing four-quarter earnings surprise of 3.9%, with projected sales and EPS growth of 13.1% and 12.7% respectively [15]

Core Insights - Corporate leadership is experiencing a significant transformation with an increase in women leading publicly traded companies, resulting in market-beating performance and innovative growth strategies [2][4] - Gender-diverse leadership is being recognized by financial markets, with ESG-focused funds prioritizing companies with women in executive roles, indicating a shift towards inclusive leadership driving sustainable growth [4] Company Highlights - **Accenture (ACN)**: Under Julie Sweet's leadership, Accenture made a $3 billion investment in AI, doubling its AI workforce and restructuring its growth model to enhance innovation and brand leadership [3] - **The Estée Lauder Companies Inc. (EL)**: Rashida La Lande's appointment as executive vice president and Global General Counsel in 2024 strengthened the company's legal and compliance frameworks during a transformation period [3] - **Adobe Inc. (ADBE)**: Lara Balazs, as chief marketing officer, has significantly enhanced Adobe's brand and marketing strategy, contributing to strong financial performance with adjusted EPS of $5.08 in Q1 2025, up from $4.48 year-over-year [9][10] - **McKesson Corporation (MCK)**: Michele Lau's role as chief legal officer has been pivotal in navigating regulatory scrutiny and managing complex litigation, with her compensation reflecting a strategic alignment with shareholder value [12][13] - **Centene Corporation (CNC)**: Sarah M. London has transformed Centene's operations since becoming CEO in March 2022, leading to $163 billion in revenues in 2024 and serving nearly 28 million members [15][16] - **Bumble Inc. (BMBL)**: Whitney Wolfe Herd's leadership has driven Bumble's brand identity and strategic shifts, including a workforce reduction aimed at achieving $40 million in annual cost savings, with improved revenue guidance for Q2 2025 [19][20] Investment Opportunities - Companies led by women, such as Adobe, McKesson, Centene, and Bumble, are positioned as attractive investment opportunities due to their strong leadership and strategic vision, indicating potential for long-term success [6]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Style Scores consist of four categories: 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 ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [3] Growth Score - The Growth Score emphasizes a company's financial strength 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, utilizing factors like one-week price changes and monthly earnings estimate changes to identify optimal buying times [5] VGM Score - The VGM Score combines the three Style Scores to highlight companies with the best value, growth forecasts, and momentum, serving as a strong indicator alongside the Zacks Rank [6] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, aiding investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [7][8] Stock to Watch: Henry Schein Inc. - Henry Schein Inc. is a leading global distributor of healthcare products and services, operating in 33 countries and serving various healthcare practitioners [11] - Currently rated 3 (Hold) on the Zacks Rank, Henry Schein has a VGM Score of A and a Value Style Score of A, with a forward P/E ratio of 15.06, indicating attractive valuation metrics [11][12] - The company has seen upward revisions in earnings estimates, with the Zacks Consensus Estimate increasing by $0.02 to $4.86 per share for fiscal 2025, and an average earnings surprise of 2.4% [12]

Company Overview - Henry Schein Inc. is a leading distributor of health care products and services globally, serving various practitioners including dental, medical, and animal health sectors, as well as government and institutional health care clinics [11] - The company operates in 33 countries [11] Investment Ratings - Henry Schein is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid overall performance [11] - The Growth Style Score for HSIC is B, forecasting a year-over-year earnings growth of 2.5% for the current fiscal year [12] Earnings Estimates - In the last 60 days, five analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.02 to $4.86 per share [12] - HSIC has an average earnings surprise of 2.4%, suggesting a history of exceeding earnings expectations [12] Investment Potential - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Henry Schein is positioned as a potential top pick for growth investors [12]

Group 1 - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market over the next 30 days, based on three investment methodologies [2][3] Group 2 - Stocks are rated with an alphabetic system from A to F, where A indicates the highest potential for outperformance, and the Style Scores are categorized into Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] - The Value Score focuses on identifying undervalued stocks using various financial ratios, while the Growth Score emphasizes a company's financial health and future growth potential [3][4] - The Momentum Score assesses stocks based on price trends and earnings outlook, and the VGM Score combines all three styles to identify stocks with the best overall potential [5][6] Group 3 - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize returns, while stocks with lower ranks should be approached cautiously [9][10] Group 4 - Henry Schein Inc. is a leading global distributor of healthcare products and services, operating in 33 countries and serving various healthcare practitioners [11] - Currently rated 3 (Hold) by Zacks, Henry Schein has a VGM Score of A and a Growth Style Score of B, with a projected year-over-year earnings growth of 2.5% for the current fiscal year [11][12] - Recent upward revisions in earnings estimates and a solid earnings surprise average of 2.4% position Henry Schein as a potential growth investment [12]

Core Insights - Cencora, Inc reported a 10.3% increase in second-quarter 2025 sales to $75.5 billion, slightly missing the consensus estimate of $75.68 billion, primarily driven by an 11.4% revenue increase in the U.S. Healthcare Solutions segment [1] Financial Performance - U.S. Healthcare Solutions revenue reached $68.3 billion, attributed to market growth driven by unit volume increases, particularly in diabetes and weight loss products in the GLP-1 class, as well as specialty products sold to physician practices and health systems [2] - Adjusted EPS for the quarter was $4.42, reflecting a 16.3% year-over-year increase, surpassing the consensus estimate of $4.11 [2] - Adjusted gross profit for the second quarter was $2.9 billion, a 15.2% increase year-over-year, mainly due to growth in the U.S. Healthcare Solutions segment, although partially offset by a decline in the International Healthcare Solutions segment [3] - Adjusted gross profit margin improved to 3.86%, up 16 basis points, while adjusted operating income rose to $1.2 billion, a 15.3% increase, driven by the U.S. Healthcare Solutions segment [4] Guidance and Outlook - Cencora updated its fiscal year 2025 financial guidance, projecting adjusted diluted EPS between $15.70 and $15.95, an increase from the previous range of $15.30 to $15.60, compared to the consensus of $15.46 [5] - Revenue growth for the International Healthcare Solutions segment is now expected to be between 3% and 4%, down from the previous estimate of 4% to 5% [5] - Adjusted consolidated operating income growth is anticipated to be between 13.5% and 15.5%, an increase from the prior range of 11.5% to 13.5% [6]