Leerink says struggles at Cencora’s largest customer seem ‘more than manageable’

Leerink notes that given the Walgreens Boots Alliance (WBA) results and it being Cencora’s (COR) largest customer, the firm wanted to provide what it views as context on the relationship. Walgreens was 26% of Cencora’s FY23 revenue but a meaningfully lower contributor to EBIT. Leerink conducted a very quick sensitivity, looking at the potential exposure in the event that Walgreens loses a meaningful amount of share through its store closure plan. The bottom line of the firm’s analysis shows that, assuming 25% script loss for Walgreens, it would be a 2% headwind compared to FY25/FY26 results for Cencora. While Leerink acknowledges that “obviously it is never a positive when your largest customer is struggling,” the worst case assumption for Cencora flow-through seems more than manageable to the firm. Leerink has an Outperform rating on Cencora’s shares with a price target of $275.