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 13% year to date compared with the industry’s 6.6% growth. The S&P 500 Index has soared 28.6% 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 $44.82 billion.Image Source: Zacks Investment ResearchCOR’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%.What’s Driving COR’s Growth?Cencora reported robust fourth-quarter fiscal 2024 results, with earnings per share (EPS) of $3.34 (up 17% year over year) and revenues of $79.05 billion (up 15%). Strong performance in its U.S. Healthcare Solutions segment, particularly in specialty products and GLP-1 medications, drove the growth. Internationally, revenues rose 6% despite currency challenges, supported by the European and Canadian markets. However, the International segment’s operating income slightly declined due to higher technology expenses.For fiscal 2025, adjusted EPS is estimated to be in the range of $14.80-$15.10, indicating growth of 8-10% from the prior-year level. Revenues are projected to rise 7-9%. Revenues from the U.S. Healthcare Solutions segment and the International Healthcare solutions business are estimated to increase 7-9%. Adjusted operating income is expected to improve 5-6.5%.Cencora also announced the acquisition of Retina Consultants of America, expanding its specialty capabilities beyond oncology. This acquisition complements its pharmaceutical-centric strategy, strengthens its Management Services Organization portfolio and positions the company in the growing retina and ophthalmology market.Meanwhile, Cencora’s focus on specialty pharmaceuticals remains a significant growth driver. Increasing demand for GLP-1 products and specialty distribution to physicians and health systems supports strong revenue momentum. Investments in distribution infrastructure and technology improve logistics support, temperature-sensitive product handling and enhance compliance with regulatory standards. Investments in automation and continuity within its European and Canadian businesses ensure resilience and scalability in international markets. Renewed collaborations with Express Scripts and Walgreens strengthen core distribution capabilities and align resources to meet customer needs effectively.What’s Hurting 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.Higher sales of low-margin GLP-1 products and declining COVID-related revenues compress profit margins.  Changes in U.S. healthcare policy, particularly Medicare Part B and D reimbursement reforms, could adversely impact profitability. A $418 million goodwill impairment on PharmaLex reflects underperformance in outsourced pharma services due to market pressures.Increasing competition in specialty and biosimilar markets may challenge market share and pricing strategies.Cencora, Inc. Price Cencora, Inc. price | Cencora, Inc. QuoteEstimate 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 $14.88 to $14.93 per share.The consensus mark for first-quarter fiscal 2025 revenues is pegged at $78.02 billion, indicating an 8% improvement from the year-ago reported actuals. The bottom-line estimate is pinned at $3.50, implying year-over-year growth of 6.7%.Stocks to ConsiderSome better-ranked stocks in the broader medical space are Masimo MASI, Accuray ARAY and AxoGen AXGN.Masimo, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 49.4% compared with the industry’s 6.7% growth year to date.Accuray, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.ARAY’s shares have lost 32.2% against the industry’s 6.7% growth year to date.AxoGen, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 252% for 2025. It delivered a trailing four-quarter average earnings surprise of 91.11%.AXGN’s shares have risen 111% year to date compared with the industry’s 6.7% growth.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want 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 Accuray Incorporated (ARAY): Free Stock Analysis Report Masimo Corporation (MASI): Free Stock Analysis Report Cencora, Inc. (COR): Free Stock Analysis Report AxoGen, Inc. (AXGN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks