Cencora Earnings: Healthy Margins Make Up for Slightly Tempered Sales; Fair Value Estimate Raised

Narrow-moat Cencora reported second-quarter earnings that came in slightly better than we expected. Total sales of $68.4 billion were up 7.8% year over year as both US and international solutions enjoyed solid utilization trends and delivered solid growth. Management raised the bottom of the adjusted diluted EPS guidance range to $13.30 from $13.25 on the backdrop of strong margin growth. After ticking up our margin assumptions for the near term and accounting for time value of money impact, we raise our fair value estimate to $194 per share from $183.