On Wednesday, Cencora Inc (NYSE: COR) shares received continued support from Citi, with the firm reiterating a Buy rating and a $284.00 price target on the company's shares. This endorsement comes despite recent reports of Cencora's dealings with a cybersecurity incident involving the Dark Angels hacking group.
Citi's analyst commented on the situation, noting that while Bloomberg reported Cencora paid $75 million to the hacking gang, Cencora itself could not confirm this figure. Instead, Cencora referred to its latest quarterly report, which listed $30.2 million in 'Other' expenses, most of which were attributed to the cybersecurity event.
The company has indicated that the issue has been resolved, as per their 8-K filing dated July 31. This suggests that the actual payout may be less than the reported $75 million. Cencora's management has acknowledged the event but confirmed it will not significantly impact the company's financials.
The incident is not the first cybersecurity challenge for Cencora. Last year, one of its foreign subsidiaries suffered a hack that temporarily disrupted operations for two weeks. Following these events, Citi's analyst anticipates that Cencora may increase its expenditure on cybersecurity measures to prevent future incidents.
In other recent news, Cencora Inc reported robust financial performance for its fiscal 2024 third quarter, with revenue surpassing $74 billion, an 11% increase year-over-year, and adjusted diluted earnings per share (EPS) rising by 14% to $3.34. This led to an upward adjustment in the full-year outlook.
BofA Securities revised its stance on Cencora, reducing the price target to $245 from the previous $275 and downgrading the stock from a Buy to a Neutral rating. The firm's reassessment followed changes in the drug distribution industry's growth and competitive dynamics.
Baird, a financial services company, revised its price target for Cencora to $283 from $287, while maintaining its 'Outperform' rating, following Cencora's updated fiscal year 2025 initial outlook and the extension of its distribution contract with Evernorth into 2029.
TD Cowen reiterated a Buy rating and a $271.00 price target for Cencora's stock, indicating that the exclusion of the branded drug Humira from Evernorth's commercial formulary starting in 2025 would have a negligible effect on Cencora's adjusted earnings per share (EPS) for fiscal year 2025.
Cencora also announced the appointment of Frank Clyburn, former CEO of International Flavors and Fragrances Inc. and Executive Vice President at Merck, as an independent director to its Board of Directors. This addition is expected to bolster the company's growth strategies. These are the recent developments for Cencora.
InvestingPro Insights
In light of Cencora Inc's (NYSE: COR) recent cybersecurity challenges, it's worth noting the company's financial resilience and market position. According to InvestingPro data, Cencora boasts a robust market capitalization of $44.98 billion, and despite the incidents, it has maintained a healthy revenue growth of 11.56% over the last twelve months as of Q3 2024. This growth underscores the company's ability to expand its business amidst challenges.
Moreover, Cencora's commitment to shareholder returns is evident, having raised its dividend for 19 consecutive years, with a dividend growth of 5.15% in the same period. This, coupled with a dividend yield of 0.87%, could reassure investors of the company's stable financial management. Cencora's stock generally trades with low price volatility, which could be a sign of a mature and stable company that investors can rely on during turbulent times in the cybersecurity landscape.
For those seeking more comprehensive analysis, there are 18 additional InvestingPro Tips available, which provide deeper insights into Cencora's financial health and market performance. These tips can be accessed through the InvestingPro platform, offering valuable guidance for both current and potential investors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.