Acquisition and Investments - Cencora acquired an 85% interest in Retina Consultants of America for $4,042.0 million in cash, with additional contingent considerations totaling $1,633.2 million[33] - The company invested $718.4 million for a 34.9% interest in a joint venture to acquire OneOncology in June 2023, and acquired RCA, a management services organization, on January 2, 2025[83] - The acquisition of RCA and investments in other businesses may lead to integration challenges and unanticipated liabilities[84] Revenue and Growth - The U.S. Healthcare Solutions segment accounted for approximately 66% of revenue in fiscal 2025, with Walgreens and Boots contributing about 25% and Evernorth Health Services about 13%[42] - Revenue increased by $27.4 billion, or 9.3%, from the prior fiscal year, driven by growth in both U.S. and International Healthcare Solutions segments[209] - U.S. Healthcare Solutions segment revenue grew by $25.6 billion, or 9.7%, primarily due to increased sales of specialty products and GLP-1 products, which saw a sales increase of $7.7 billion, or 26.9%[210] - International Healthcare Solutions revenue increased by $1.7 billion, or 6.1%, mainly due to a $1.3 billion increase in sales at the European distribution business[211] Operational Efficiency - The company aims to optimize and grow its U.S. Healthcare Solutions businesses by improving operating and capital efficiencies[26] - The company continues to invest in advanced information systems and automated warehouse technology to enhance operational efficiency[47] - U.S. Healthcare Solutions has made significant investments in electronic ordering systems to strengthen customer relationships and reduce operating costs[48] - The company processes a substantial portion of its purchase orders and payments electronically, improving productivity and operating leverage[49] Customer Concentration - The top 10 customers represented approximately 66% of revenue in fiscal 2025, indicating a concentrated customer base[42] - Walgreens and Boots accounted for approximately 25% of the company's revenue in fiscal 2025 and about 38% of accounts receivable as of September 30, 2025[78] - Evernorth Health Services contributed approximately 13% to the company's revenue in fiscal 2025[78] Cybersecurity and Information Security - The company continues to invest in cybersecurity capabilities to enhance its cyber resiliency[45] - The company faces increasing information security risks due to evolving cyber threats, with incidents like ransomware attacks becoming more prevalent and severe[97] - Cybersecurity incidents have previously occurred, with notable incidents disclosed in February 2024 and March 2023, although they did not have a material adverse impact on the company[98] - The company has a Cybersecurity Incident Response Process that outlines actions to be taken in response to cybersecurity incidents, ensuring appropriate escalation to senior management and the Board[163] - The company has invested in cybersecurity training for employees, requiring periodic access-based and role-based training to mitigate risks[164] Regulatory and Legal Risks - The company is subject to various federal, state, and local environmental laws, which could significantly impact its financial position and operations[70] - The company faces significant challenges in achieving anticipated benefits from its agreements with Walgreens and Boots, including potential delays and changes in supplier relationships[80] - Legal and regulatory changes regarding coverage, reimbursement, and pricing could adversely affect the company’s business and results of operations[118] - The company is facing ongoing investigations and lawsuits related to opioid distribution, which could adversely affect its financial position and operations[139] Financial Performance - Gross profit increased by $1,568.5 million, or 15.8%, primarily due to higher gross profit in the U.S. Healthcare Solutions segment and gains from antitrust litigation settlements[214] - U.S. Healthcare Solutions' gross profit rose by $1,482.3 million, or 23.1%, with a gross profit margin of 2.72%, an increase of 30 basis points compared to the prior fiscal year[215] - Total operating expenses increased by $1,115.2 million, or 14.4%, primarily due to the acquisition of RCA and increased acquisition-related expenses[214] Employee and Labor Relations - The company has over 51,000 employees globally, with approximately 47,000 being full-time employees[56] - Approximately 24% of the company's global employees are covered by collective bargaining agreements, mostly outside the U.S.[57] - Approximately 24% of the company's employees are covered by collective bargaining agreements, which could lead to operational disruptions if strikes occur[95] Market and Economic Factors - Pharmaceutical sales in the U.S. are projected to grow at a compound annual growth rate of approximately 8.4% from 2024 through 2029[20] - Generic pharmaceuticals currently represent approximately 90% of the prescription volume in the U.S., providing higher gross profit margin opportunities[22] - Geopolitical risks, including tariffs and inflation, could adversely impact the company's financial position and operational costs[90] Stock and Shareholder Information - The company's common stock is traded on the New York Stock Exchange under the symbol "COR," with 2,166 record holders as of October 31, 2025[188] - The company approved quarterly dividend increases, with the latest increase in November 2025 to $0.600 per share, representing a 9% increase from the previous rate[188] - The company authorized a share repurchase program of up to $2.0 billion, with $882.2 million available as of September 30, 2025, after purchasing 1.9 million shares for $435.4 million during fiscal 2025[192]

Market Performance - Major U.S. indexes showed mixed performance last week, with the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average declining by 2.7%, 1.4%, and 0.5% respectively [1] - Investors are shifting focus from high-valuation technology and AI stocks to more defensive sectors due to market volatility [1] Federal Reserve and Economic Data - The end of a 43-day government standoff has reduced political risks, but delays in key economic data releases have created uncertainty for the Federal Reserve and investors [2] - The Fed is balancing economic growth and inflation, with inflation remaining above the 2% target and a resilient labor market casting doubt on December rate cut expectations [2] Zacks Research Performance - Zacks Research has provided guidance that led to significant stock performance, with Macy's shares increasing by 14.9% since its upgrade to Zacks Rank 1 on September 18, outperforming the S&P 500's 2.2% increase [3][4] - Fresnillo plc also saw a 7.2% return since its upgrade to Zacks Rank 1 on September 19, compared to the S&P 500's 1.8% increase [4] Zacks Model Portfolio Returns - A hypothetical portfolio of Zacks Rank 1 stocks returned +8.64% in 2025 through September 1, outperforming the S&P 500's +7.60% [4] - The Zacks Model Portfolio has outperformed the S&P 500 index by over 12 percentage points since 1988, with an annualized average return of +23.8% compared to +11.3% for the S&P 500 [5] Specific Stock Performances - United Natural Foods, Inc. (UNFI) shares increased by 32.4% after its Zacks Recommendation was upgraded to Outperform [7] - Caterpillar Inc. (CAT) gained 35.9% over the past 12 weeks, while CACI International Inc. (CACI) returned 20.1% during the same period [10] Earnings Certain Admiral Portfolio (ECAP) - The ECAP returned -1.30% in Q3 2025, underperforming the S&P 500's +8.1% gain, and +2.72% year-to-date compared to the S&P 500's +14.84% [15] - The portfolio aims to minimize capital loss by holding shares of companies with a proven track record of earnings stability [16] Earnings Certain Dividend Portfolio (ECDP) - Johnson & Johnson (JNJ) returned 10.9% over the past 12 weeks, while UnitedHealth Group (UNH) increased by 5.9% [18] - The ECDP returned -0.01% in Q3 2025, underperforming the S&P 500's +8.1% gain [20] Top 10 Stock Portfolio - MasTec, Inc. (MTZ) has jumped 41.2% year-to-date, outperforming the S&P 500's 14.7% increase [22] - The Top 10 portfolio has produced a cumulative return of +2,553.1% since 2012, significantly outperforming the S&P 500's +545.2% [24]

Core Insights - BD (Becton, Dickinson and Company) has received WHO prequalification for its Onclarity™ HPV Assay, enhancing access to cervical cancer screening in low- and middle-income countries [1][4]. Product Details - The BD Onclarity™ HPV Assay detects 14 high-risk HPV types, allowing for individual identification of six high-risk types and three genotype groups, which aids in risk stratification and patient management [2][3]. - The assay is approved for self-collection, including at-home self-collection in countries recognizing the CE mark, thus improving access in resource-limited settings [2][4]. Impact on Healthcare - The ability to identify more individual HPV types enables clinicians to manage high-risk cases more effectively and guide follow-up for low-risk patients, ensuring appropriate care and reducing resource demand [3][4]. - WHO emphasizes the importance of regular screening to prevent cervical cancer, which is the fourth most common cancer in women globally, with a woman dying from it every 90 seconds [7]. System Features - The BD Viper™ LT System is designed for decentralized testing, featuring a compact design that automates sample preparation and amplification, making it suitable for labs with limited infrastructure [5]. - The BD COR™ System offers high-throughput automation for centralized labs, capable of processing nearly 1,650 tests and delivering up to 1,000 results in 24 hours, maximizing efficiency [6].

Cencora ( COR ) hasn’t received much coverage since early August, despite its growing relevance and strong fundamentals. The company remains largely overlooked by investors, yet I view it as one of the most attractive names in theHi there! I’m Narek, and I’ve been in the investment world for over six years. I started out as an equity analyst at European banks, digging into reports and learning how to spot value in the markets. I’ve worked across sectors — from telecom to industry — and found that behind eve ...

Cencora is set to invest $1bn by 2030 for expanding its US pharmaceutical distribution network, adding resilience and capacity to support customer needs across the country. This includes opening a second national distribution centre in Harrison, Ohio and expanding facilities in California and Alabama. The centre will span 530,000ft² and become operational by spring 2027. It aims to boost both throughput and storage capacity, incorporating advanced automation technologies, including autonomous mobile rob ...

Core Insights - Cencora, Inc. reported strong fourth-quarter fiscal 2025 results, with adjusted EPS of $3.84, exceeding estimates by 2.7% and showing a 15% year-over-year improvement [2][9] - The company achieved total revenues of $83.73 billion for the quarter, a 5.9% increase year-over-year, and also surpassed consensus estimates [4][9] - For the full fiscal year 2025, adjusted EPS was $16.00, reflecting a 16.3% increase from the previous year, while total revenues reached $321.33 billion, up 9.3% year-over-year [3][4] Revenue Details - Total revenues for the fourth quarter were $83.73 billion, up 5.9% year-over-year, beating the Zacks Consensus Estimate by 0.7% [4][9] - For fiscal 2025, total revenues were reported at $321.33 billion, marking a 9.3% increase year-over-year [4] Segmental Analysis - U.S. Healthcare Solutions segment revenues reached $75.8 billion, up 5.7% year-over-year, driven by increased sales of GLP-1 drugs and specialty products [5] - International Healthcare Solutions segment revenues amounted to $7.9 billion, reflecting a 7.6% year-over-year increase, with a 5.7% rise at constant currency [6] Margin Analysis - Adjusted gross profit was $2.9 billion, an 18.4% increase year-over-year, with an adjusted gross margin of 3.55%, up 36 basis points [8] - Adjusted operating income was $1.1 billion, up 20.6% year-over-year, with an adjusted operating margin of 3.47%, expanding 37 basis points from the previous year [8] Financial Update - The company ended the fiscal fourth quarter with cash and cash equivalents of $4.36 billion, significantly up from $2.23 billion in the previous quarter [10] - Cumulative net cash used in operating activities was $4.98 billion, compared to $618.1 million a year ago [10] Dividend Update - Cencora's board declared a quarterly dividend of 60 cents per share, payable on December 1, 2025, to shareholders of record by November 14, 2025 [11] FY26 Guidance Issued - The company provided guidance for fiscal 2026, estimating adjusted EPS in the range of $17.45-$17.75, with total revenues projected to grow by 5-7% [12][13] - U.S. Healthcare Solutions segment sales are expected to grow by 5-7%, while International Healthcare Solutions revenues are projected to rise by 6-8% [12][13] Overall Performance - Cencora's performance in the fourth quarter was strong, with earnings and revenues exceeding estimates, and the EPS guidance for fiscal 2026 was also above expectations [14] - The company has seen a 53.3% increase in shares year-to-date, outperforming the industry growth of 2.8% [14]

Financial Data and Key Metrics Changes - Cencora achieved adjusted operating income and adjusted diluted EPS growth of 16% in fiscal 2025 [3][4] - Adjusted diluted EPS for Q4 was $3.84, a 15% increase, with consolidated revenue of $83.7 billion, up 6% [13][19] - Consolidated gross profit was $2.9 billion, up 18%, with a gross profit margin of 3.47%, an increase of 37 basis points [13][14] - Consolidated operating income was $1.0 billion, up 20% compared to the prior year quarter [14][20] - Fiscal 2025 consolidated revenue was $321.3 billion, up 9% [19] Business Line Data and Key Metrics Changes - U.S. healthcare solutions segment revenue was $75.8 billion, up approximately 6% year-over-year, with operating income increasing by 25% to $872 million [15][16] - International healthcare solutions segment revenue was $7.9 billion, an increase of 8% on an as-reported basis, but operating income decreased by 2% [16][17] - GLP-1 products contributed $876 million, or 10% year-over-year growth, to the U.S. healthcare solutions segment [15][16] Market Data and Key Metrics Changes - The international healthcare solutions segment saw a rebound in global specialty logistics business, with shipment volumes returning to growth [17][74] - The U.S. healthcare solutions segment is expected to grow at a rate of 5%-7% in fiscal 2026 [23] Company Strategy and Development Direction - Cencora's strategy focuses on three growth priorities: leading with market leaders, enhancing patient access to pharmaceuticals, and strengthening its position in specialty [4][28] - The company is raising long-term guidance for adjusted operating income growth to 6%-9% and adjusted EPS growth to 9%-13% [4][28] - Significant investments totaling $1 billion through 2030 are planned to enhance distribution network and specialty distribution capacity [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued market growth and the strength of the business [3][4] - The company is focused on driving growth through disciplined investments and enhancing customer experience [5][6] - Management acknowledged challenges in the global consulting services businesses but remains optimistic about core business growth [17][18] Other Important Information - Cencora generated $3 billion of adjusted free cash flow and ended the year with a cash balance of $4.4 billion [20] - The company announced a 9% increase in its quarterly dividend, marking the 21st consecutive annual dividend increase [21] Q&A Session Summary Question: Strategic view on business and potential divestitures - Management emphasized a focused strategic execution and disciplined capital allocation to align with growth areas [32][35] Question: Next steps for the MSO platform - Management highlighted the potential for leveraging clinical trial expertise and back-office activities across MSO platforms [40][42] Question: Durability of U.S. healthcare segment growth - Management noted exceptional results in the U.S. segment and confidence in long-term guidance despite recent headwinds [46][49] Question: Profitability and strategic alternatives for businesses in the "other" segment - Management confirmed that all businesses in the "other" segment are profitable, with some exploring strategic alternatives for long-term success [78][81] Question: Margin expansion sustainability - Management indicated that the higher margin specialty segment is expected to continue outpacing revenue growth, contributing positively to margins [85][87] Question: Changes in macro assumptions and guidance - Management clarified that the guidance increase is driven by improved positioning and asset mix rather than changes in macro assumptions [90]

Financial Data and Key Metrics Changes - In fiscal 2025, the company achieved adjusted operating income and adjusted diluted EPS growth of 16% [3][4] - Adjusted diluted EPS for Q4 was $3.84, a 15% increase, with consolidated revenue of $83.7 billion, up 6% [13][19] - Consolidated gross profit was $2.9 billion, up 18%, with a gross profit margin of 3.47%, an increase of 37 basis points [13][14] - Consolidated operating income was $1.0 billion, up 20% compared to the prior year quarter [14][20] - Consolidated revenue for the full year was $321.3 billion, up 9% [19] Business Line Data and Key Metrics Changes - U.S. healthcare solutions segment revenue was $75.8 billion, up approximately 6%, with operating income increasing by 25% to $872 million [15][16] - International healthcare solutions segment revenue was $7.9 billion, an increase of 8% on an as-reported basis, with operating income decreasing by 2% [16][17] - Sales of GLP-1 products increased by $876 million, or 10% year-over-year, contributing 50 basis points to segment revenue growth [15][16] Market Data and Key Metrics Changes - The international healthcare solutions segment saw a rebound in global specialty logistics business, with shipment volumes returning to growth [17][73] - The company expects international healthcare solutions revenue growth in the range of 6%-8% for fiscal 2026 [24][73] Company Strategy and Development Direction - The company is raising long-term guidance for adjusted operating income growth to 6-9% and adjusted EPS growth to 9-13% [4][28] - Strategic priorities include leading with market leaders, enhancing patient access to pharmaceuticals, and strengthening the position in specialty [4][29] - The company is focusing on growth-oriented investments and improving customer experience through advanced data analytics and technologies [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued market growth and the strength of the business [3][4] - The company is committed to advancing its leadership in the healthcare industry through significant investments [5][6] - Management highlighted the importance of enhancing productivity and efficiency in serving the pharmaceutical supply chain [6][10] Other Important Information - The company announced a $1 billion investment through 2030 to expand its distribution network [9][10] - The company generated $3 billion of adjusted free cash flow and ended the year with a cash balance of $4.4 billion [20][21] - The company approved a 9% increase to its quarterly dividend, marking the 21st consecutive annual dividend increase [21] Q&A Session Summary Question: Strategic view on the business and potential divestitures - Management emphasized a focused strategic execution and the importance of allocating resources to align with growth areas [32][35] Question: Next steps in the evolution of the MSO platform - Management discussed leveraging clinical trial expertise and back-office activities across MSO platforms to enhance care delivery [40][42] Question: Durability of growth in U.S. healthcare solutions segment - Management noted exceptional results in the U.S. segment and projected continued strong performance despite headwinds [46][49] Question: Growth rates between specialty and generics - Management indicated that specialty growth is expected to be accretive to overall operating income growth, while generic growth is moderating [66][68] Question: Confidence in international business growth - Management expressed confidence in returning to growth in the international segment, driven by strong demand for specialty logistics [72][73] Question: Potential impact of divestitures on profitability - Management acknowledged that while some businesses in the "other" segment are profitable, divestitures could lead to a more focused and higher growth portfolio [78][80]

Financial Data and Key Metrics Changes - Cencora achieved adjusted operating income and adjusted diluted EPS growth of 16% in fiscal 2025 [3][11] - Adjusted diluted EPS for Q4 was $3.84, a 15% increase, with consolidated revenue of $83.7 billion, up 6% [12][19] - Consolidated gross profit was $2.9 billion, up 18%, with a gross profit margin of 3.47%, an increase of 37 basis points [12][13] - Consolidated operating income was $1.0 billion, up 20% compared to the prior year quarter [13][19] - Consolidated revenue for fiscal 2025 was $321.3 billion, up 9% [19] Business Line Data and Key Metrics Changes - U.S. healthcare solutions segment revenue was $75.8 billion, up approximately 6% year-over-year, with operating income increasing by 25% to $872 million [15][16] - International healthcare solutions segment revenue was $7.9 billion, an increase of 8% on an as-reported basis, but operating income decreased by 2% [16][17] - GLP-1 products contributed $876 million, or 10% year-over-year growth, to the U.S. healthcare solutions segment [15][16] Market Data and Key Metrics Changes - The international healthcare solutions segment saw a rebound in global specialty logistics business, with shipment volumes returning to growth [17][56] - The U.S. healthcare solutions segment continues to benefit from strong utilization trends, particularly in specialty [15][52] Company Strategy and Development Direction - Cencora's strategy focuses on three growth priorities: leading with market leaders, enhancing patient access to pharmaceuticals, and strengthening its position in specialty [4][29] - The company is raising long-term guidance for adjusted operating income growth to 6-9% and adjusted EPS growth to 9-13% [4][28] - Significant investments totaling $1 billion through 2030 are planned to enhance distribution network and specialty distribution capacity [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued market growth and the strength of the business, emphasizing the importance of strategic investments [3][4] - The company is focused on enhancing productivity and efficiency in serving the pharmaceutical supply chain [5][10] - Management acknowledged the impact of losing an oncology customer but remains optimistic about future growth [26][40] Other Important Information - The company announced a 9% increase in its quarterly dividend, marking the 21st consecutive annual dividend increase [20] - A strategic review led to the identification of businesses that do not align closely with future strategy, including MWI Animal Health and certain components of Pharmalex [7][21] Q&A Session Summary Question: Strategic view on business and potential divestitures - Management emphasized a focused strategic execution and the importance of investing in areas aligned with their strategy [31][32] Question: Next steps for the MSO platform - Management discussed leveraging capabilities across MSO platforms and the potential for shared resources to enhance care delivery [36][37] Question: U.S. healthcare segment performance and growth durability - Management highlighted strong performance in the U.S. segment, with adjusted operating income growth of 25%, and expressed confidence in sustaining growth despite headwinds [39][40] Question: International business growth outlook - Management indicated confidence in returning to growth in the international segment, driven by strong demand for specialty logistics and a tailored portfolio [55][56] Question: Profitability and strategic alternatives for businesses in the "other" segment - Management confirmed that all businesses in the "other" segment are currently profitable and discussed the potential for strategic alternatives to enhance long-term success [59][60]

Core Insights - Cencora reported quarterly earnings of $3.84 per share, exceeding the Zacks Consensus Estimate of $3.79 per share, and showing an increase from $3.34 per share a year ago, resulting in an earnings surprise of +1.32% [1] - The company achieved revenues of $83.73 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.69% and reflecting a year-over-year increase from $79.05 billion [2] - Cencora's stock has increased by approximately 53.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.05, with projected revenues of $87.22 billion, and for the current fiscal year, the EPS estimate is $17.37 on revenues of $342.35 billion [7] - The estimate revisions trend for Cencora was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical Services industry, to which Cencora belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting that the industry's outlook may impact stock performance [8] - Another company in the same industry, Ardent Health, is expected to report quarterly earnings of $0.42 per share, reflecting a year-over-year change of +121.1%, with revenues anticipated to be $1.55 billion, up 7.1% from the previous year [9][10]