Cencora Earnings: Starts 2024 on a Strong Foot With Robust Sales Growth and a Raised Outlook

Narrow-moat Cencora reported first-quarter results that were better than our expectations. Total sales were up 15.0% year over year thanks to a solid performance from the U.S. healthcare segment. On the backdrop of a strong start to the year, management raised its full-year sales guidance for the segment to 10%-12% growth from a previous 7%-10% growth, and the firm’s adjusted diluted EPS range to $13.25-$13.50 from $12.70-$13.00. After upping our near-term assumptions and baking in time value of money impacts, we raise our fair value estimate to $183 per share from $176.