Here's Why You Should Hold Cencora Stock in Your Portfolio for Now

Cencora, Inc. COR is well-poised for growth on the back of robust U.S. Healthcare Solutions business and product launches. However, intense competition is a concern.Shares of this Zacks Rank #3 (Hold) company have risen 14% year to date against the industry’s 4% decline. The S&P 500 Index has risen 22.7% in the same time frame.Cencora is one of the world’s largest pharmaceutical service companies. It is focused on providing drug distribution and related services to reduce healthcare costs and improve patient outcomes. The company has a market capitalization of $45.02 billion.COR’s bottom line is anticipated to improve 10.6% over the next five years. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 6.59%.Image Source: Zacks Investment ResearchWhat’s Driving COR’s Growth?The U.S. pharmaceutical market is expected to benefit from robust organic growth rates, better patient access to medical care, improved economic conditions and favorable population demographics in the coming quarters.In the third quarter of fiscal 2024, revenues at U.S. Healthcare Solutions totaled $67.2 billion, up 12.2% year over year. The company continues to witness a strong segmental performance due to growth in all markets and strong demand for specialty products, especially GLP-1 drugs. High demand for the recently approved GLP-1 drugs for diabetes and/or weight loss is likely to continue going forward.Segmental operating income amounted to $698.3 million, up 9.9% year over year. Higher gross profit (including fees earned from the distribution of government-owned COVID-19 treatments and a gross profit on sales from specialty physician practices) contributed to the upside.Revenues from the U.S. Healthcare Solutions segment are expected to grow 12-13% in fiscal 2024. Operating income is anticipated to increase 10-12% during the same time frame.Cencora is anticipated to benefit from long-term growth in generics, boosting investors’ confidence. The company is well-positioned to facilitate the smooth market entry of its products. Factors such as robust organic growth rates in the U.S. pharmaceutical market, improved patient access to care, better economic conditions, favorable population demographics, the introduction of innovative drugs like hepatitis C treatments and a strong brand pricing environment are expected to contribute positively. Additionally, the company’s focus on specialty drugs is promising.In May, Cencora announced that it has agreed to repurchase shares of its common stock from Walgreens Boots Alliance Holdings LLC for approximately $400 million in a private transaction. The company also raised its fiscal 2024 guidance for adjusted earnings per share (EPS), now estimated to be in the range of $13.55-$13.65 (previously $13.35-$13.55).The uptick reflects a lower weighted average diluted share count, partially offset by higher net interest expenses due to lower investment balances of cash being used for share repurchases. COR estimates revenues to grow 12% year over year. Total adjusted operating income is expected to improve 10-11% during the same time frame.Cencora’s multinational distribution footprint and global platform of commercialization services make it a natural partner for manufacturers bringing their products to the market. With the company’s increasing presence in pharma services, it is able to cultivate its relationship with pharma companies during the early development process and position itself as not only a provider of logistics and distribution services but also as an integrated partner for supporting the successful commercialization of its products. These factors are likely to have favored the stock’s growth during fiscal 2024.What’s Hurting the COR Stock?Cencora operates in a highly competitive pharmaceutical distribution and related healthcare services market. The generic industry is facing consolidation of customers and manufacturers, global competitors and regulatory challenges.The company faces additional competition from manufacturers, chain drugstores, specialty distributors, and packaging and healthcare technology companies. The increasing competition is likely to affect its business.Estimate TrendCOR has been witnessing a positive estimate revision trend for fiscal 2024. In the past 30 days, the Zacks Consensus Estimate for earnings has increased from $13.62 to $13.63 per share.The consensus mark for fourth-quarter fiscal 2024 revenues is pegged at $77.68 billion, indicating a 12.7% improvement from the year-ago reported actuals. The bottom-line estimate is pinned at $3.21, implying year-over-year growth of 12.2%.Cencora, Inc. Price Cencora, Inc. price | Cencora, Inc. QuoteStocks to ConsiderSome better-ranked stocks in the broader medical space are Universal Health Services UHS, HealthEquity (HQY) and Aveanna Healthcare AVAH, eachcarrying a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Universal Health Services has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.Universal Health Services has gained 52.6% compared with the industry's 48.5% growth year to date.HealthEquity’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.76%. HQY has an estimated long-term growth rate of 28.2%.HQY’s shares have risen 32.1% year to date against the industry’s 4% decline.Aveanna Healthcare's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 47.5%. AVAH has an estimated growth rate of 233% for 2025.AVAH's shares have surged 97.8% year to date compared with the industry’s16.3% growth.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Universal Health Services, Inc. (UHS): Free Stock Analysis Report Cencora, Inc. (COR): Free Stock Analysis Report HealthEquity, Inc. (HQY): Free Stock Analysis Report Aveanna Healthcare Holdings Inc. 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