Cardinal Health, Cencora upgraded at Wells Fargo on industry outlook

June 03, 2025 09:16 AM PDT | By EODHD

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Cardinal Health, Cencora upgraded at Wells Fargo on industry outlook — Image source: Kalkine Media

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[Business on Wall Street in Manhattan] Pgiam/iStock via Getty Images Wells Fargo on Tuesday upgraded medical distributors Cardinal Health (NYSE:CAH [https://seekingalpha.com/symbol/CAH]) and Cencora (NYSE:COR [https://seekingalpha.com/symbol/COR]) to Overweight from Equal Weight, citing a strong industry backdrop as a major reason for both upgrades. In addition to industry tailwinds, analyst Stephen Baxter pointed to a strong business mix and management’s execution as other reasons for his bullish call on Cardinal Health (NYSE:CAH [https://seekingalpha.com/symbol/CAH]). “We think the improvement in valuation and tighter spread vs peers is justified by a combination of a strong industry backdrop, improving business mix, and impressive execution,” the analyst wrote as he raised CAH’s price target to $179 from $136 per share. With above-consensus estimates, Baxter sees an upside for the stock if the pharma industry continues to outperform and tariff concerns related to the company’s GMPD unit prove to be less than peak levels. The analyst’s upgrade on Cencora (NYSE:COR [https://seekingalpha.com/symbol/COR]) was based on a strong industry backdrop and the company’s relatively low exposure to macro/policy risks.

“With tariffs a more challenging dynamic for medical distributors than pharma distributors, COR’s lack of exposure to medical stands out,” as it could be a near-term advantage and a potential long-term advantage over its rival McKesson (MCK [https://seekingalpha.com/symbol/MCK]) due to recent struggles, Baxter argued. Analysts opined that Cencora (NYSE:COR [https://seekingalpha.com/symbol/COR]) could withstand the impact of President Donald Trump’s initiative to lower U.S. drug prices through his Most Favored Nation policy, as the company’s business has a lower exposure to physician practice/MSO earnings streams compared to MCK. Baxter also increased his price target on Cencora (COR [https://seekingalpha.com/symbol/COR]) to $337 from $274 per share. MORE ON CENCORA, CARDINAL HEALTH * Cencora Continues To Deliver As A Healthcare Distributor With Further Growth Signs [https://seekingalpha.com/article/4787549-cencora-continues-to-deliver-as-a-healthcare-distributor-with-further-growth-signs] * Cencora, Inc.

(COR) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4782949-cencora-inc-cor-q2-2025-earnings-call-transcript] * Cencora, Inc. 2025 Q2 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4782871-cencora-inc-2025-q2-results-earnings-call-presentation] * S&P 500’s five most overbought and oversold stocks [https://seekingalpha.com/news/4443303-s-and-p-500-s-five-most-overbought-and-oversold-stocks] * Cencora increases FY2025 EPS guidance to $15.70-$15.95 amid specialty growth [https://seekingalpha.com/news/4443214-cencora-increases-fy2025-eps-guidance-to-15_70-15_95-amid-specialty-growth]

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