Cencora Earnings: Fiscal 2024 Ends With Strong Momentum From GLP-1s and Prescription Trends

Narrow-moat Cencora reported solid fiscal fourth-quarter results and wrapped up the year on a better note than we anticipated. Total sales of $79.1 billion were up 14.7% year over year, higher than our expectation for $78.5 billion. Solid prescription utilization trends across generic and specialty drugs provided nice tailwinds. Sales of GLP-1 drugs were up $3.1 billion, or 55%, versus last year and contributed over 40% of US distribution growth. This dragged on margins for the segment, but earnings still beat our estimate as cost management in other parts of the business was a partial offset. After updating our model and accounting for the time value of money, we've raised our fair value estimate to $230 per share from $215.