CONSHOHOCKEN, Pa. - Cencora, Inc. (NYSE: COR), a global pharmaceutical solutions organization with a market capitalization of $43.4 billion, has completed the acquisition of Retina Consultants of America (RCA), a management services organization of retina specialists. With the closure of this deal, Cencora has revised its fiscal year 2025 adjusted earnings per share (EPS) guidance upwards.
The transaction, which was finalized for a cash outlay of $4.4 billion after adjustments, sees Cencora acquiring an 85% stake in RCA, with the remaining equity held by certain RCA physicians and management members. This strategic move aims to enhance Cencora's position in specialty medical services and to extend its management services organization (MSO) solutions, thereby delivering increased value to stakeholders including physicians and patients.
In light of the acquisition, Cencora's financial guidance for the fiscal year 2025 has been updated to reflect RCA's expected contribution and continued momentum within Cencora's U.S. Healthcare Solutions segment. The company now anticipates an adjusted diluted EPS in the range of $15.15 to $15.45, up from the previously estimated range of $14.80 to $15.10. According to InvestingPro analysis, Cencora appears undervalued at its current trading price of $224.74, with 14 additional exclusive insights available to subscribers.
Cencora, ranked #10 on the Fortune 500 and #18 on the Global Fortune 500, is recognized for partnering with pharmaceutical innovators to improve access to therapies and for its reliable delivery of pharmaceuticals and healthcare products. The company employs over 46,000 people worldwide and reports annual revenues of $294 billion, with a solid 12.1% year-over-year growth. InvestingPro data shows the company maintains strong financial health with a "GREAT" overall score and has consistently raised its dividend for 20 consecutive years.
The company's forward-looking statements, including expectations of future earnings and performance, are subject to risks and uncertainties that could cause actual results to differ materially. These include the inherent uncertainties in financial estimates and judgments, the ability to achieve expected benefits and synergies from the acquisition, and the impact of competition and economic conditions on the businesses of Cencora and RCA.
This news is based on a press release statement, and it should be noted that Cencora does not provide forward-looking guidance on a GAAP basis due to certain financial information that cannot be reasonably estimated at this time. The non-GAAP financial measures are used by Cencora's management for internal performance evaluations and incentive compensation planning.
In other recent news, Cencora Inc. has witnessed significant growth in its fiscal 2024 fourth quarter. The company's earnings and revenue rose by 15% year-over-year, with the adjusted diluted EPS for Q4 increasing by 17% to $3.34 and consolidated revenue reaching $79.1 billion. Additionally, Cencora announced the acquisition of Retina Consultants of America (RCA), which is expected to contribute approximately $0.35 to earnings in its first year.
Cencora has been given an Outperform rating by Mizuho (NYSE:MFG), with a target price of $280. The rating is based on a 16 times price-to-earnings (P/E) multiple of the projected calendar year 2026 earnings per share (EPS) of $17.00, slightly above the consensus estimate of $16.62 EPS. Furthermore, BofA Securities revised its stock price target for Cencora to $260 from $255, following Cencora's inaugural virtual Product Showcase event.
In more recent developments, Cencora's fiscal 2025 guidance projects an adjusted diluted EPS between $14.80 and $15.10 and a revenue growth of 7% to 9%. The company's relationship with its largest customer, Walgreens, is expected to remain stable, despite the possibility of minor prescription volume and price reductions. Lastly, the recent CEO transition to Bob Mauch is not expected to significantly alter Cencora's operational strategy.
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