Cencora, Inc. (COR)
Valuation method revision, frozen evidence and price
Starter long, accumulated selectively | Conviction 6.8Bear
$253.75
$253.75
Base
$387.00
$387.00
Bull
$512.50
$512.50
Weighted
$385.06
$385.06
Company specific valuation method
Normalized owner EPS and justified P/E is primary. Enterprise unlevered FCF DCF and normalized FCF yield are cross checks. Revenue multiples are rejected because drug cost is passed through at thin spreads.
Reference price $323.77, 24 August 2026. Research cutoff 25 August 2026. Both unchanged.
Current to forecast calibration
Mobile: swipe the table horizontally to view Bear, Base, Bull and driver columns.
| Value bearing variable | Current, dated | Bear FY2027 / FY2028 | Base FY2027 / FY2028 | Bull FY2027 / FY2028 | Calibration driver |
|---|---|---|---|---|---|
| US revenue, USD bn | 294.4 | 303 / 310 | 309 / 325 | 314 / 338 | Prescription volume, branded price and specialty mix; GLP 1 invoice growth is not treated as equal profit. |
| International revenue, USD bn | 29.7 | 30.0 / 30.3 | 31.0 / 32.5 | 32.0 / 34.5 | European volume, manufacturer services, specialty logistics and currency, with held for sale assets excluded consistently. |
| Other revenue, USD bn | 8.7 | 6.0 / 4.0 | 5.0 / 2.0 | 4.5 / 1.5 | MWI, Profarma and portfolio exits reduce consolidated revenue; proceeds are not counted as operating growth. |
| Gross profit, USD bn | 13.221 | 13.35 / 13.65 | 13.85 / 14.75 | 14.25 / 15.65 | Distribution spread, specialty and oncology services, biosimilars, manufacturer economics and acquisition mix. |
| Gross spread, percent revenue | 3.973 | 3.94 / 3.96 | 4.01 / 4.1 | 4.06 / 4.18 | Low margin GLP 1 and branded pass through offset by specialty, provider services, sourcing and portfolio mix. |
| Specialty and services growth, percent | 12.0 | 5.0 / 5.0 | 8.0 / 8.0 | 11.0 / 10.0 | Oncology practices, RCA, manufacturer services, biologics and biosimilars; organic evidence controls acquisition credit. |
| Operating expenses, USD bn | 10.179 | 10.45 / 10.72 | 10.65 / 11.25 | 10.85 / 11.7 | OneOncology and RCA costs, wages, logistics, systems, integration and ordinary legal expense; no blanket adjustment. |
| Operating margin, percent | 0.914 | 0.86 / 0.85 | 0.93 / 0.98 | 1.0 / 1.06 | Gross profit less recurring expense, with revenue pass through preventing mechanical revenue leverage. |
| Cash tax rate, percent | 22.1 | 23.5 / 23.5 | 22.0 / 22.0 | 21.0 / 21.0 | Q3 reported tax anchor normalized for geography, deductions, acquisition structure and settlement effects. |
| Working capital cash flow, USD bn | 0.761 | -0.8 / -0.6 | -0.2 / 0.0 | 0.1 / 0.2 | Receivables, inventory, accounts payable and supplier terms; current TTM cash timing is normalized, not capitalized. |
| Property capex, USD bn | 0.761 | 0.82 / 0.88 | 0.8 / 0.86 | 0.84 / 0.92 | Warehouses, cold chain, technology and practice assets scale with volume and services. |
| Depreciation and amortization, USD bn | 1.15 | 1.25 / 1.3 | 1.24 / 1.3 | 1.26 / 1.34 | Frozen run rate plus acquisition amortization; purchase accounting is separated but required reinvestment remains charged. |
| Owner FCF conversion, percent normalized earnings | 105.0 | 80 / 82 | 100 / 105 | 108 / 112 | Normalized from filing FCF after working capital, capex, legal payments, tax and integration, not the strongest quarter. |
| Legal cash payments, USD bn | 0.55 | 0.65 / 0.65 | 0.55 / 0.5 | 0.5 / 0.45 | Accrued litigation liability of $3.774bn and opioid schedules remain explicit; liability does not disappear in Bull. |
| WACC, percent | 8.8 | 9.5 / 9.5 | 8.8 / 8.8 | 8.2 / 8.2 | Distributor defensiveness offset by leverage, concentration, acquisition and legal risk; no extra concentration premium after cash flow stress in Bear. |
| Terminal growth, percent | 2.5 | 2.0 / 2.0 | 2.5 / 2.5 | 3.0 / 3.0 | Nominal prescription volume and service growth below specialty growth, constrained by mature distribution economics. |
| Debt, USD bn | 11.723 | 11.8 / 11.5 | 11.0 / 10.0 | 10.5 / 8.8 | Long and short term debt after OneOncology financing, reduced only from owner cash after liabilities and reinvestment. |
| Cash, USD bn | 2.815 | 2.2 / 2.0 | 2.6 / 3.0 | 3.2 / 4.0 | Minimum liquidity and working capital needs constrain distributable cash. |
| Net debt, USD bn | 8.908 | 9.6 / 9.5 | 8.4 / 7.0 | 7.3 / 4.8 | Debt less cash, linked to cash conversion and acquisition spending. |
| Net acquisition spending, USD bn | 5.0 | 0.5 / 0.3 | 0.6 / 0.5 | 0.75 / 0.7 | Frozen OneOncology context plus disciplined tuck ins; acquisition outlays reduce cash before repurchases. |
| Share repurchases, USD bn | 1.0 | 0.2 / 0.2 | 1.0 / 1.2 | 1.4 / 1.6 | Repurchases occur after funding operations, legal obligations, acquisitions and leverage, and only below intrinsic value. |
| Diluted shares, million | 193.9 | 194.5 / 195.0 | 191.0 / 188.0 | 188.0 / 184.0 | Employee dilution offsets weak buybacks in Bear; Base and Bull repurchases reduce shares without double counting EPS. |
Scenarios
| Case | Probability | FY2028 common earnings, $bn | Diluted shares, m | Normalized EPS | P/E | Exact target | Displayed target | Return | Owner FCF, $bn |
|---|---|---|---|---|---|---|---|---|---|
| Bear | 25% | 3.4125 | 195.0 | $17.50000000 | 14.5x | $253.7500000000 | $253.75 | -21.63% | 2.798 |
| Base | 50% | 4.0420 | 188.0 | $21.50000000 | 18.0x | $387.0000000000 | $387.00 | 19.53% | 4.244 |
| Bull | 25% | 4.6000 | 184.0 | $25.00000000 | 20.5x | $512.5000000000 | $512.50 | 58.29% | 5.152 |
Weighted value $385.06. Expected return 18.93%.
Scorecard
Business Quality 7.0, Management 6.8, Industry 7.5, Valuation 6.4, Risk 6.2. Exact conviction 6.785. No rubric band changes.