Cencora NYSE: COR executives said the company expects its specialty-focused strategy to support continued growth into fiscal 2027, citing demand in oncology and retina, expanded physician-services capabilities and momentum in its international businesses.
Speaking at the Morgan Stanley Global Healthcare Conference, Chief Executive Officer Bob Mauch said the company’s recent growth has reflected its position in specialty pharmaceuticals across health systems and community physician practices. He said Cencora has deployed capital to expand capabilities in those areas while refining its portfolio to align investments with its long-term strategy.
“We’re confident that the trends will continue” into 2027, Mauch said, pointing to Cencora’s specialty-centric and pharmaceutical-centric strategy in both its U.S. and international segments.
Chief Financial Officer Eva Boratto said the company remains in its planning process and will provide more details on fiscal 2027 guidance during its earnings call in November. She noted that 2027 will include four additional months of contribution from the OneOncology acquisition compared with the current year, along with expected continued growth from investments in management services organizations, or MSOs, and specialty.
Utilization and Walgreens relationship
Boratto said prescription utilization trends had been elevated in 2025 before facing pressure during January and February of the current fiscal year. Utilization rebounded in March and remained consistent through the fiscal third quarter, she said, a trend reflected in Cencora’s fourth-quarter outlook.
Executives also addressed investor questions about volume moving outside Cencora under its relationship with Walgreens. Mauch described Walgreens as an important, long-term strategic customer and said it is normal for large buyers to maintain smaller portions of their business with other wholesalers, even when prime vendor agreements are in place.
He said the company filed an 8-K to clarify the limited scope of the reported volume move after it surfaced in a research report. Boratto said the vast majority of the Walgreens business remains under the primary contract. The change became effective July 1, was included in the company’s fourth-quarter guidance, and will have a wraparound impact for the remaining three quarters of fiscal 2027.
Despite that impact, Boratto said Cencora expects to deliver accelerating growth in the fourth quarter.
Specialty focus and MSO strategy
Mauch said oncology and retina remain Cencora’s principal specialty focus because they are highly pharmaceutical-centric and increasingly served in physician offices. He cited innovation pipelines, an aging population and broader access to care as market drivers.
The company’s specialty exposure includes distribution, group purchasing organizations and MSOs, as well as health system relationships. Mauch said Cencora is positioned with health systems that specialize in areas such as cancer treatment.
While the company plans to expand within oncology and retina, Mauch said it would be “very unlikely” for Cencora to move into other specialties unless another area develops a similarly pharmaceutical-centric, physician-administered model.
Cencora accelerated its purchase of the remaining majority interest in OneOncology because management saw an opportunity to combine capabilities with Retina Consultants of America, or RCA, Mauch said. The two platforms serve different clinical specialties but can share operational capabilities and best practices.
- RCA’s clinical-trial support capabilities are being extended to OneOncology.
- Cencora sees potential to develop analytics services for pharmaceutical manufacturers using information including pharmaceutical utilization, real-world evidence and clinical indicators.
- Both MSO platforms can grow independently by attracting existing practices and physicians coming out of fellowship, Mauch said.
Mauch said Cencora intends to support the clinical-trial ecosystem through patient access, practice-level enrollment capabilities and specialty logistics provided through World Courier. However, he said the company does not need to operate in the middle of the clinical-trial process to be a significant supporting partner.
Biosimilars, policy and international operations
On biosimilars, Mauch said conversions involving specialty mail customer CuraScript and related Express Scripts business are consistent with historical arrangements in which customers insource certain generic conversions. Such business can represent significant revenue but carries relatively low margins, he said, meaning the profit effect of a shift can be limited.
By contrast, Mauch characterized Part B biosimilars as a tailwind for Cencora because they fit the company’s specialty distribution and physician-services model. Boratto added that specialty is already accretive to margins because of the associated services Cencora provides, though the benefit from biosimilars may not match the margin effect historically associated with generics.
Mauch said the company had considered potential Inflation Reduction Act effects when investing in OneOncology and RCA. He said Cencora believes community-based specialty physicians offer high access and lower-cost care, and the company is working with policymakers to avoid changes that could affect physician economics. He also said the company is monitoring early-stage proposals related to the 340B program.
Internationally, Boratto said World Courier’s global specialty logistics business has rebounded as the clinical-trial market has improved and as operational and leadership changes have helped execution. Cencora’s third-party logistics operations in Europe are also growing through customer retention and new business, she said.
Capital allocation
Boratto said Cencora has not changed its capital-allocation priorities: investing for growth, pursuing M&A focused on oncology and retina, conducting opportunistic share repurchases, growing its dividend with earnings and maintaining a strong balance sheet. She noted the company repurchased $1 billion of shares in the third quarter and has repaid the $800 million RCA financing-related term loan.
On portfolio optimization, Boratto said there were no timing updates. For MWI, the company had previously indicated that modeling assumptions should use a mid-year transaction timing.
About Cencora (NYSE:COR)
Cencora, Inc NYSE: COR is a global healthcare company that provides pharmaceutical sourcing, distribution and related services. The company connects biopharmaceutical manufacturers with pharmacies, hospitals, health systems, physician practices and other healthcare providers, helping move prescription medicines and healthcare products through the supply chain.
Cencora's operations include pharmaceutical distribution, specialty pharmaceutical services, manufacturer support and patient-centered solutions.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Cencora, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Cencora wasn't on the list.
While Cencora currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
Get This Free Report
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
