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Mckesson Corp. (MCK)
NYSE:MCK
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McKesson (MCK) AI Stock Analysis

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MCK

McKesson

(NYSE:MCK)

Rating:66Neutral
Price Target:
$733.00
▲(6.10% Upside)
McKesson's overall stock score is driven by strong earnings guidance and robust segment performance, particularly in the U.S. Pharmaceutical sector. The company's strategic acquisitions and raised guidance reflect confidence in sustained growth. However, high leverage and low profit margins present financial risks, and the stock's valuation appears relatively high. Technical indicators suggest a neutral to slightly bearish short-term outlook.
Positive Factors
Business Growth
Strong first quarter results highlight McKesson's diversified exposure to rapidly growing parts of the healthcare supply chain.
Financial Performance
MCK's FY1Q'26 results were fairly solid, with all three key segments coming in above consensus expectations on an adjusted EBIT basis.
Guidance Increase
The increase in McKesson's EPS guidance is attributed to operational strength across various segments, which is a modest positive for the company.
Negative Factors
Competitive Performance
Peer COR's US Healthcare performance had more upside than MCK's US Pharma segment.
Stock Pressure
Not a blow-out, and could represent potential modest stock pressure given the dynamics of the results (and lack of significant upside), but underlying momentum still appears fairly solid.

McKesson (MCK) vs. SPDR S&P 500 ETF (SPY)

McKesson Business Overview & Revenue Model

Company DescriptionMcKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions (RxTS). The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The International segment offers distribution and services to wholesale, institutional, and retail customers in 13 European countries and Canada. The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers. The RxTS segment serves biopharma and life sciences partners and patients to address medication challenges for patients throughout their journeys; connects pharmacies, providers, payers, and biopharma companies to deliver innovative access and adherence solutions; and provides third-party logistics and wholesale distribution support solutions. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.
How the Company Makes MoneyMcKesson generates revenue primarily through its pharmaceutical distribution segment, which involves the sale of branded and generic pharmaceuticals to hospitals, pharmacies, and other healthcare providers. This segment accounts for a significant portion of the company's revenue, driven by the volume of drugs distributed and the associated service fees. Additionally, McKesson earns revenue from its medical-surgical distribution services, where it supplies medical supplies and equipment to healthcare facilities. Another key revenue stream comes from its technology solutions, which include software and services designed to streamline healthcare operations and enhance patient care delivery. The company also benefits from strategic partnerships with pharmaceutical manufacturers and healthcare providers, allowing it to optimize its supply chain, enhance service offerings, and tap into new markets. Overall, McKesson's diverse revenue model, supported by its scale and industry relationships, contributes to its financial stability and growth.

McKesson Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Shows how revenue is distributed across various business segments, indicating which areas are growing or declining and where the company is focusing its efforts.
Chart InsightsMcKesson's U.S. Pharmaceutical segment shows robust growth, driven by increased prescription volumes and specialty products, aligning with earnings call highlights of double-digit revenue and profit growth. Conversely, the International segment faces challenges, with revenue declines linked to divestitures like Rexall and Well.ca. The Prescription Technology Solutions segment benefits from strong demand for affordability solutions, while the Medical-Surgical Solutions segment is set for separation, introducing structural uncertainty. Overall, McKesson projects strong fiscal 2026 growth, underpinned by strategic acquisitions and a focus on oncology and biopharma services.
Data provided by:Main Street Data

McKesson Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
McKesson's fiscal first quarter results were strong, with record revenue growth and increased full-year guidance, driven by robust segment performance and strategic acquisitions. However, the company faced challenges such as the impact of Rite Aid's bankruptcy and a decrease in international operating profit due to divestitures.
Q1-2026 Updates
Positive Updates
Record Revenue Growth
McKesson reported record consolidated revenues of $97.8 billion, an increase of 23% over the prior year.
Raised Full Year Guidance
The company raised its full year guidance to $37.10 to $37.90, up from the previous range of $36.90 to $37.70.
Strong Segment Performance
Three of McKesson's segments delivered double-digit growth in adjusted operating profit.
Oncology and Biopharma Services Expansion
Completed acquisition of a controlling interest in Core Ventures and PRISM Vision, expanding the oncology and ophthalmology platforms.
Prescription Technology Solutions Growth
The segment delivered double-digit growth in revenue and adjusted operating profit, driven by increased demand for access solutions.
U.S. Pharmaceutical Revenue Increase
U.S. Pharmaceutical revenues increased 25% to $90 billion, driven by increased prescription volumes and growth in oncology and specialty products.
Operational Efficiency Improvements
McKesson continues to improve operational leverage through automation investments, achieving up to 90% automation in some distribution centers.
Negative Updates
Impact of Rite Aid Bankruptcy
Recorded a GAAP-only pretax provision for bad debts of $189 million due to Rite Aid's second bankruptcy filing.
Challenges in the International Segment
International segment operating profit decreased by 3%, driven by the divestiture of the Canada-based Rexall and Well.ca businesses.
Company Guidance
During McKesson's First Quarter Fiscal 2026 Earnings Call, the company provided robust financial guidance, reflecting strong performance across its segments. The company reported a 23% increase in consolidated revenues to $97.8 billion, with adjusted operating profit rising by 9% to $1.4 billion. McKesson raised its full-year earnings guidance to a range of $37.10 to $37.90 per diluted share, up from the previous range of $36.90 to $37.70. The U.S. Pharmaceutical segment, a major contributor, saw a 25% revenue increase, largely driven by prescription volume growth and specialty products distribution. The Prescription Technology Solutions segment achieved a 16% revenue growth, bolstered by demand for access solutions, while the Medical-Surgical Solutions segment posted a 22% increase in operating profit due to cost optimization efforts. The International segment, despite facing divestitures, maintained stable performance. Additionally, McKesson's strategic acquisitions, such as PRISM Vision and Core Ventures, are expected to significantly contribute to the company's operating profit growth, reinforcing its commitment to long-term strategic priorities in oncology and biopharma services.

McKesson Financial Statement Overview

Summary
McKesson demonstrates strong revenue growth and improved profitability, supported by robust cash flow generation. However, the balance sheet's negative equity and high leverage pose potential risks. Continued focus on improving operational efficiency and managing leverage will be crucial for sustainable growth.
Income Statement
85
Very Positive
McKesson's income statement reflects strong revenue growth and improved profitability. The gross profit margin remained stable, while the net profit margin improved to 0.92% in 2025 from 0.97% in 2024, indicating better cost management. The revenue growth rate from 2024 to 2025 was 16.2%, showcasing robust business expansion. However, EBIT and EBITDA margins showed modest improvement, highlighting room for operational efficiency enhancements.
Balance Sheet
60
Neutral
The balance sheet of McKesson shows a high debt-to-equity ratio due to negative equity, posing a risk. The ROE is negative owing to negative equity, but the company has managed to maintain a stable total asset base. The equity ratio remains negative due to negative stockholders' equity, which is concerning from a financial stability perspective.
Cash Flow
75
Positive
McKesson's cash flow statement highlights a strong free cash flow growth, increasing from $3.63 billion in 2024 to $6.08 billion in 2025, indicating excellent cash generation capability. The operating cash flow to net income ratio is robust, signifying effective cash conversion. The free cash flow to net income ratio also improved, further supporting the company's liquidity and investment capacity.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue377.60B359.05B308.95B276.71B263.97B238.23B
Gross Profit12.56B12.48B12.20B11.87B12.65B11.58B
EBITDA5.19B5.25B4.67B5.74B3.11B-3.60B
Net Income3.16B3.29B3.00B3.56B1.11B-4.54B
Balance Sheet
Total Assets81.31B75.14B67.44B62.32B63.30B65.02B
Cash, Cash Equivalents and Short-Term Investments2.68B5.69B4.58B4.68B3.53B6.28B
Total Debt9.93B7.39B7.39B7.29B7.54B9.40B
Total Liabilities82.17B76.83B69.04B63.81B65.09B63.57B
Stockholders Equity-1.97B-2.07B-1.97B-1.86B-2.27B-21.00M
Cash Flow
Free Cash Flow5.74B5.23B3.63B4.60B3.90B3.90B
Operating Cash Flow6.55B6.08B4.31B5.16B4.43B4.54B
Investing Cash Flow-4.21B-733.00M-1.07B-542.00M-89.00M-415.00M
Financing Cash Flow-1.98B-3.96B-3.34B-4.37B-6.32B-1.69B

McKesson Technical Analysis

Technical Analysis Sentiment
Positive
Last Price690.84
Price Trends
50DMA
700.50
Negative
100DMA
703.39
Negative
200DMA
658.62
Positive
Market Momentum
MACD
-2.90
Negative
RSI
51.05
Neutral
STOCH
47.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCK, the sentiment is Positive. The current price of 690.84 is above the 20-day moving average (MA) of 680.12, below the 50-day MA of 700.50, and above the 200-day MA of 658.62, indicating a neutral trend. The MACD of -2.90 indicates Negative momentum. The RSI at 51.05 is Neutral, neither overbought nor oversold. The STOCH value of 47.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCK.

McKesson Risk Analysis

McKesson disclosed 38 risk factors in its most recent earnings report. McKesson reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

McKesson Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$8.44B21.9911.18%2.29%14.98%
66
Neutral
$85.41B27.4051.23%0.43%20.35%11.96%
65
Neutral
$3.35B15.6012.05%0.63%4.23%
60
Neutral
$56.54B30.00130.60%0.75%11.56%5.31%
59
Neutral
$35.53B23.18-43.80%1.36%-1.94%85.70%
51
Neutral
$7.86B-0.33-41.57%2.23%23.26%-2.03%
43
Neutral
$378.50M-144.11%-17.10%-2720.40%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MCK
McKesson
690.84
122.08
21.46%
COR
Cencora
295.14
53.75
22.27%
CAH
Cardinal Health
149.55
37.40
33.35%
HSIC
Henry Schein
67.13
-2.32
-3.34%
OMI
Owens & Minor
5.48
-10.46
-65.62%
PBH
Prestige Consumer Healthcare
66.91
-8.59
-11.38%

McKesson Corporate Events

Executive/Board ChangesShareholder Meetings
McKesson Holds Annual Shareholders Meeting, Key Decisions Made
Neutral
Aug 1, 2025

On July 30, 2025, McKesson Corporation held its Annual Meeting of Shareholders, where several key decisions were made. The election of board members saw all nominated individuals successfully appointed, and Deloitte & Touche LLP was ratified as the independent registered public accounting firm for the fiscal year ending March 31, 2026. Additionally, the compensation of the company’s named executive officers was approved, reflecting shareholder support for the company’s leadership and strategic direction.

Financial Disclosures
McKesson Updates Fiscal Year 2026 Financial Outlook
Neutral
Jun 9, 2025

On June 9, 2025, McKesson Corporation announced updates to its Fiscal Year 2026 Financial Outlook, increasing its full year Adjusted Earnings per Diluted Share guidance and reaffirming its effective tax rate guidance. The company highlighted potential risks and uncertainties that could impact its financial performance, including legal disputes, cybersecurity incidents, and changes in healthcare laws, which stakeholders should consider.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 03, 2025