Medical services name Cencora is Wednesday's pick for IBD 50 Growth Stocks To Watch. Cencora stock hit a buy point of a newly formed flat base Tuesday morning, after the medical supplies and distribution company raised its fiscal 2025 earnings outlook for the second time in two months on Monday.
The breakout faded on Wednesday as Cencora stock stumbled. But the company has managed to outpace a tough market in recent days and weeks.
Cencora provides drug research, warehousing and distribution as well as clinical trial support and data analytics. It serves doctors, pharmacies, hospitals and public health agencies. Its offerings treat both humans and animal patients.
The IBD 50 medical services stock ranks No. 1 out of six names in the Medical-Wholesale Drug/Supplies group. The group sprinted to No. 16 out of the 197 industry groups Investor's Business Daily tracks, up from No. 115 four weeks ago.
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Cencora Stock Fades From New High
Cencora stock is in a newly formed stage-three flat base with a 262.25 buy point on its weekly chart, according to MarketSurge pattern recognition. Shares hit the entry point and a record high Tuesday before reversing and closing below the entry. The stock is pulling back around 2.8% Wednesday.
Its relative strength line is ticking lower after climbing sharply since mid-February.
Cencora stock's 1.6 up/down volume ratio shows positive demand for the medical services name over the last 50 days.
Its IBD Accumulation/Distribution Rating of B indicates moderate institutional buying over the last 13 weeks. And its volume has trended higher than average over the last two rising weeks, as big money managers have rotated to more defensive names.
Mutual funds own 60% of shares, while management has an 11% stake in Cencora stock.
Medical Supplies Name Shows Steady Profit Growth
The leading medical supplies name beat fiscal first-quarter earnings and sales estimates when it filed its report Feb. 5. Cencora raised its fiscal 2025 profit outlook when it filed the earnings release. Then, management lifted that forecast further — to a range of $15.30 to $15.60 a share — at the 2025 Leerink Partners Global Healthcare Conference on Monday.
Cencora also seeks more acquisitions.
"We'll continue to do strategic acquisitions like RCA and buying the balance of OneOncology is also probable to happen during our planning cycle," Cencora Chief Financial Officer James Cleary said at the Leerink conference.
Meanwhile, analyst forecasts for fiscal 2025 profits recently were revised up to $15.42 per share, or a 12% increase. And 2026 projections now call for $16.86 in earnings per share, or a 9% boost. Sales are expected to grow an average 8% over the next four quarters.
The company has been a steady profit grower as seen in its stellar Earnings Stability factor of two out of 99 possible — with a lower number being better.
Lastly, the medical supplies stock holds a near-ideal 98 Composite Rating.
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