TD Cowen Maintains Buy Rating on Cencora Inc (NYSE: COR) with $271 Price Target
TD Cowen has reiterated its bullish stance on Cencora Inc (NYSE: COR), maintaining a Buy rating and setting a price target of $271 for the company's stock. The firm's analysis indicates that the recent decision by Evernorth to exclude the branded drug Humira from its commercial formulary in 2025 will have minimal impact on Cencora's adjusted earnings per share (EPS) for fiscal year 2025.
According to TD Cowen, the expected effect on Cencora's FY25 adjusted EPS is insignificant, with a reduction of just $0.04 or 0.3% from their estimated $14.77. This change is not projected to impact Cencora's financial guidance for FY25, which will be revealed during the fourth fiscal quarter results in November.
Furthermore, the firm highlighted the lucrative opportunities for distributors in the biosimilar market, particularly on the medical benefit side, where margins are higher compared to the pharmacy benefit side. This context is crucial for Cencora as it prepares for upcoming changes in drug formularies.
In recent developments, Cencora appointed Frank Clyburn, a seasoned pharmaceutical industry executive, as an independent director to its Board of Directors. Clyburn's experience is expected to bolster the company's growth strategies.
Financially, Cencora reported strong growth in its fiscal 2024 third quarter, with revenue exceeding $74 billion, marking an 11% year-over-year increase. Adjusted diluted EPS also showed significant growth of 14%, reaching $3.34. The company raised its full-year outlook based on these results, citing a successful pharmaceutical-centric strategy and robust commercial performance.
Cencora's OneOncology business and Good Neighbor Pharmacy network were commended for their performance and growth potential, contributing positively to the company's EPS growth rate. Additionally, Cencora engaged in share repurchases and reported a cash balance of $3.3 billion, demonstrating financial strength.
InvestingPro Insights:
- Cencora Inc (NYSE: COR) has a market cap of $46.16 billion, reflecting investor confidence in its capabilities and growth prospects.
- With a P/E ratio of 25.37, the company trades at a premium relative to its earnings, justified by consistent dividend growth over 19 years.
- Revenue growth of 11.56% in the last twelve months and a 33.68% one-year price total return indicate strong market performance and optimism.
- Cencora is a key player in the Healthcare Providers & Services industry, offering stability and growth opportunities as the sector evolves.
For a detailed analysis and more InvestingPro Tips, visit [website] where additional insights are available for a comprehensive view of Cencora's investment potential and market dynamics.
In conclusion, Cencora Inc remains a strong investment opportunity with promising growth prospects in the pharmaceutical market. Investors can benefit from the company's solid financial performance, strategic initiatives, and position in the evolving healthcare industry. Stay informed with InvestingPro for real-time data and insights on Cencora's market position and financial health.