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With a market cap of $47.5 billion, Cencora, Inc. (COR) is a healthcare solutions provider and operates in the pharmaceutical distribution sector. Based in Conshohocken, Pennsylvania, the company specializes in sourcing and distributing a wide range of healthcare products and services globally.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Cencora fits this criterion perfectly, exceeding the mark. Cencora is renowned for its pivotal role in the pharmaceutical supply chain, handling approximately 20% of all pharmaceuticals distributed in the United States and ranking among the top companies on the Fortune 500 list.
Cencora has experienced a 3.4% decline from its 52-week high of $246.75 reached in April. Over the past three months, its shares have dropped 1.5%, contrasting with the marginal gains of the broader S&P 500 Healthcare Sector SPDR (XLV) during the same period.
Despite recent declines, in the longer term, COR has shown strong performance with a 16% surge on a YTD basis, outpacing the XLV’s 7.1% gains. Shares of Cencora have risen nearly 27%, surpassing the XLV’s 11.3% gain during the same period.
To confirm the bullish price trend, COR has been trading above its 200-day moving average since March last year and remained above its 50-day moving average since September last year despite some recent fluctuations.
Cencora's outperformance over the past year is driven by substantial revenue growth, increased profitability, strategic investments in margin-enhancing sectors, and efforts to expand its leadership in healthcare distribution. However, a 4.1% stock drop on May 1 followed Q2 earnings results that missed revenue estimates, largely due to shortages of popular weight-loss drugs. Despite this setback, Cencora exceeded profit expectations and raised its adjusted earnings forecast for fiscal 2024.
Nevertheless, its rival Cardinal Health, Inc. (CAH) has gained 12.4% over the past 52 weeks and is up 2.3% on a YTD basis, which lags behind Cencora's stock performance.
Analysts are optimistic about Cencora due to its impressive price performance over the past year. With a consensus rating of "Strong Buy" from 15 analysts, the mean price target of $255 suggests a potential premium of just around 7% over its current trading levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
