Cencora to Continue Selective MSO Investments in Oncology and Retina Through 2026

Cencora: MSO investment and Eva’s guidance and capital-allocation approach

1. MSO investment can continue, but within a narrower framework

Yes—Cencora intends to continue investing in MSOs despite the evolving ASP regulatory environment. Management expressed confidence in the long-term outlook for community physicians, including reimbursement, and specifically said it intends to continue investing in the MSO space. ¹

However, the strategy is not to expand broadly across every specialty. Cencora’s stated focus is on:

• RCA in retina, through accretive tuck-in acquisitions; and
• OneOncology in oncology, also through accretive tuck-ins. ¹

Management described oncology and retina as the only specialties it currently considers sufficiently “pharmaceutical-centric” for MSO investment. Cencora will continue servicing specialty products across other sites of care, but it does not currently intend to establish MSOs in other disease states. ¹

The practical implication is that ASP pressure does not appear to be prompting a retreat from MSOs; instead, it reinforces a selectivity filter. New MSO opportunities would need to combine specialty physician-administered products with a strong pharmaceutical connection. Management left open the possibility of entering another specialty if those characteristics emerge, but said it sees no such opportunity in the near term. ¹

2. ASP exposure remains a monitored risk, not a quantified change to the strategy

The excerpts do not provide a quantified estimate of how the proposed ASP rule changes would affect Cencora’s MSOs, GPO, revenue, or earnings. Accordingly, there is no disclosed basis for assuming a specific financial impact from the ASP proposals. ²

The company’s response is therefore best characterized as monitoring and portfolio discipline rather than a strategic reset:

• Cencora remains confident in the long-term community-physician opportunity. ¹
• It intends to keep MSO investment concentrated in oncology and retina. ¹
• It will continue assessing regulatory developments rather than broadening investment into less clearly pharmaceutical-centric specialties. ¹

This distinction matters. The company is not claiming that ASP changes are irrelevant; rather, it is indicating that the current MSO thesis is sufficiently tied to pharmaceutical-centric specialties that it remains investable under the expected regulatory uncertainty. That conclusion is management’s strategic stance, not a quantified risk assessment. ¹²

3. Eva’s guidance philosophy is continuity, discipline, and flexibility

Eva indicated that she sets guidance through a disciplined internal process based on business performance and operating expectations, supported by a long-tenured team with deep expertise. She also said she intends to preserve Cencora’s track record of meeting or exceeding expectations. ³

Therefore, the excerpts do not suggest a new, more aggressive, or more conservative guidance philosophy under Eva. The stated approach is to:

1. Ground guidance in internal operating realities;
2. Preserve credibility through disciplined forecasting; and
3. Maintain flexibility as the portfolio and regulatory environment evolve. ³

Cencora also reiterated confidence in its long-term guidance and cited the strength of its execution, market conditions, and portfolio. ⁴ The company plans to provide full fiscal 2027 guidance on its November earnings call, so the excerpts do not establish a detailed FY2027 outlook or any ASP-specific adjustment to that outlook. ⁵

The near-term fiscal 2026 guidance was raised, but that was attributed to strong performance and opportunistic share repurchases—not to a change in Eva’s guidance methodology. Adjusted EPS guidance was increased to $17.75-$17.95 from $17.70-$17.90, while U.S. Healthcare Solutions operating-income growth was projected at 14.5%-15.5%. ⁶ The company also expected fourth-quarter double-digit growth across reportable segments, helped in the U.S. by fully lapping the OneOncology customer loss and by an easier expense comparison. ⁷⁵

4. Capital deployment: the framework remains unchanged, but flexibility is being emphasized

Eva explicitly reaffirmed four capital-allocation priorities:

1. Internal investment in the business;
2. Strategic M&A;
3. Opportunistic share repurchases; and
4. A reasonable and growing dividend. ³

She said the intention is to build on the existing framework while enhancing flexibility to invest in the business and create shareholder value. ³ Thus, capital deployment is not being redirected exclusively toward MSOs. MSOs are one component of a broader allocation framework that also includes core business investment, strategic transactions, buybacks, and dividends. ³

The company’s recent actions illustrate that balance. It completed $1 billion of share repurchases in the third fiscal quarter, which contributed to the higher EPS guidance but also reduced interest income and led to an increased expected full-year net-interest expense of approximately $490 million. ⁵

At the same time, Cencora continues to pursue portfolio reshaping. Businesses in “Other” are described as businesses for which the company is pursuing strategic alternatives, while the timing of the MWI Animal Health merger with Covetrus remained subject to regulatory review. ⁶⁵ Cencora also said the expected timing of the EyeSouth Retina carve-out acquisition was not sufficiently certain to include in models. ⁸

5. Expected mix across businesses

The likely mix of capital deployment can be summarized as follows:

The MSO platforms are still early in their broader value-creation program. Cencora described three phases: integration into Cencora, sharing capabilities such as clinical-trial infrastructure, and eventually developing new services and analytics for physicians and pharmaceutical manufacturers. ¹⁰ Integration has progressed at RCA and OneOncology, but capability sharing is still in its early stages and the development of new services remains a future opportunity. ¹⁰

Financially, OneOncology’s performance supports continued investment but also argues for measured deployment. Management expected OneOncology to be approximately neutral to adjusted EPS over a 12-month period after financing, while its operating income was modestly ahead of initial expectations. ¹¹ OneOncology also outperformed expectations in the quarter and demonstrated an ability to attract physicians to the platform. ⁹

Bottom line

Cencora’s position is “continue investing, but stay pharmaceutical-centric and selective.” ASP-related regulatory changes have not caused management to abandon MSOs, but they strengthen the rationale for concentrating capital in oncology and retina rather than pursuing a broad multi-specialty MSO strategy. ¹

Eva’s guidance approach appears to be a continuation of Cencora’s disciplined process, with no disclosed ASP-specific change to guidance or a quantified ASP earnings impact. ³² Her capital-deployment approach likewise preserves the existing balance among internal growth investment, strategic M&A, opportunistic buybacks, and dividends, while using portfolio reshaping and business-specific selectivity to improve flexibility. ³⁸⁶

The most defensible interpretation is therefore that future capital will be weighted toward core U.S. and international healthcare businesses plus targeted oncology and retina MSO tuck-ins, while noncore assets are rationalized and shareholder returns remain an important, but not dominant, use of capital. ³¹⁶