What Happened?
Shares of healthcare distributor Cencora (NYSE: COR) jumped 3.3% in the morning session after Mizuho analyst Steven Valiquette raised the price target on the company's shares. The price target was increased to $340 from $334, while the firm kept an 'Outperform' rating on the stock. This move signaled continued confidence in Cencora's market performance. Adding to the positive mood in the sector, a key peer, Cardinal Health, reported strong quarterly results and lifted its outlook for the year. Cardinal Health's revenue grew by 22% compared to the previous year, with earnings also showing significant growth.
After the initial pop the shares cooled down to $341.97, up 2.6% from previous close.
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What Is The Market Telling Us
Cencora’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock gained 4.5% on the news that peer company McKesson raised its long-term earnings growth outlook, boosting investor sentiment across the pharmaceutical distribution sector. The move appeared to be driven by positive developments from rival pharmaceutical distributor McKesson. During its Investor Day event, McKesson announced an increase in its long-term Adjusted Earnings per Diluted Share growth target to a range of 13% to 16%, up from a previous estimate of 12% to 14%. This optimistic forecast from a major industry player seemed to lift investor confidence for the entire sector, suggesting favorable business conditions that could also benefit Cencora.
Cencora is up 52.2% since the beginning of the year, and at $341.97 per share, has set a new 52-week high. Investors who bought $1,000 worth of Cencora’s shares 5 years ago would now be looking at an investment worth $3,560.
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