Cencora stock lifts fiscal 2027 outlook after strong quarter

Cencora reported stronger fourth-quarter and full-year results on Wednesday, November 4, after the fiscal year ended September 30. The pharmaceutical solutions company also issued its fiscal 2027 outlook and raised its quarterly dividend, according to the Cencora investor release.

Cencora stock traded at 300.00 euros on Lang & Schwarz at 1:44 p.m. CET on Monday, November 9.

Stronger quarter supports new outlook

Fourth-quarter revenue increased 5.5 percent year over year to 88.4 billion United States dollars. Adjusted diluted earnings per share rose 21.4 percent to 4.66 United States dollars, while adjusted operating income climbed 22.1 percent to 1.2 billion United States dollars.

The reported earnings benefited from stronger gross profit and the contribution of the OneOncology acquisition, completed in February. Cencora also pointed to higher pharmaceutical sales, specialty products and products in the GLP-1 class. The company said lower-margin GLP-1 sales partly offset the improvement in gross profit margins.

GAAP diluted earnings per share came in at 2.71 United States dollars, compared with a loss of 1.75 United States dollars in the prior-year quarter. The comparison was affected by a 723.9 million United States dollar goodwill impairment charge recorded in the year-earlier period.

Guidance reflects specialty momentum

For fiscal 2027, management expects adjusted diluted earnings per share of 19.40 to 19.75 United States dollars, implying growth of 8 to 10 percent from the 17.97 United States dollars reported for fiscal 2026. Revenue is expected to grow 3 to 5 percent, while adjusted operating income is forecast to rise 4 to 6 percent.

The outlook assumes that the MWI Animal Health merger with Covetrus closes on March 31, 2027, and that the Profarma divestment closes in the first fiscal quarter. It excludes the pending acquisitions of EyeSouth Retina Business and American Oncology Network until those transactions close. Cencora expects adjusted free cash flow of 3.5 billion United States dollars and capital expenditure of 1.0 billion United States dollars.

The revised reporting structure will separate Pharmaceutical Distribution and Services from Specialty Pharmaceutical and Provider Services. Management expects the specialty segment to deliver revenue growth of 9 to 14 percent and adjusted operating income growth of 18 to 21 percent in fiscal 2027. That mix points to continued emphasis on higher-margin specialty services, although the MWI transaction and other portfolio changes weigh on consolidated growth.

Dividend increase adds shareholder return

Cencora declared the higher quarterly dividend on November 3. The payment of 0.66 United States dollars per common share is scheduled for November 30 to shareholders of record at the close of business on November 13. The company also plans 1.25 billion United States dollars in share repurchases during fiscal 2027.

For fiscal 2026, revenue increased 5.0 percent to 337.4 billion United States dollars and adjusted diluted earnings per share rose 12.3 percent. The company reaffirmed long-term targets of 7 to 10 percent adjusted operating income growth and 10 to 14 percent adjusted diluted earnings per share growth.

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