Leerink Partners analyst Michael Cherny has reiterated their bullish stance on MCK stock, giving a Buy rating yesterday.
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Michael Cherny has given his Buy rating due to a combination of factors influencing McKesson’s potential for growth. The decision to spin off the Medical-Surgical business, which has faced challenges, is seen as a strategic move that could positively impact the company’s overall valuation. By removing this segment, McKesson’s remaining divisions, such as US Pharma and RxTS, are expected to benefit from a re-rating, enhancing their value.
Furthermore, Cherny’s analysis includes a sum-of-the-parts evaluation, which suggests that McKesson’s current valuation has room for growth. Despite recent market challenges, the fundamentals of McKesson’s core businesses remain strong, and there is a clear path to earnings growth. This potential for upside in both the current structure and post-spin-off scenario supports the Buy rating, as Cherny anticipates appealing returns for investors.
In another report released yesterday, J.P. Morgan also maintained a Buy rating on the stock with a $765.00 price target.