McKesson (MCK) AI Stock Analysis

• Market Cap: $83.68B
• Dividend Yield: 0.43%
• Average Volume (3M): 722.70K
• Price to Earnings (P/E): 26.8
• Beta (1Y): 0.27
• Revenue Growth: 20.35%
• EPS Growth: 11.96%
• Country: US
• Employees: 44,000
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Distribution
• EPS (TTM): 8.26
• Shares Outstanding: 124,384,390
• 10 Day Avg. Volume: 1,145,920
• 30 Day Avg. Volume: 722,702
• PEG Ratio: 1.77
• Price to Book (P/B): -41.34
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 16.41
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 7.53
• Enterprise Value/Ebitda: 19.07
• 1Y Price Target: $792.08
• Price Target Upside: 20.19% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 69 Neutral
• Price Target: $725.00 ▲(10.01% Upside)

McKesson's strong earnings performance and strategic acquisitions are the most significant factors driving the score. However, technical indicators suggest bearish momentum, and the high P/E ratio indicates potential overvaluation. The balance sheet's negative equity remains a concern, but robust cash flow generation provides some offsetting strength.

Positive Factors

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.

Growth Strategy

Management remains positive about the future contribution of biosimilars and the recently acquired PRISM business.

Guidance

Management expressed confidence in the future performance of the US Pharma segment, raising its guidance to the upper half of the 12-16% range.

Negative Factors

Earnings Expectations

Fiscal Q1 consensus EPS may be too high according to the analysis.

Peer 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 Business Overview & Revenue Model

Company Description

McKesson Corporation is a leading global healthcare services and information technology company headquartered in Irving, Texas. It operates primarily in the pharmaceutical distribution and healthcare services sectors, providing a comprehensive range of products and services to healthcare providers, including hospitals, pharmacies, and pharmaceutical manufacturers. McKesson's core offerings involve the distribution of pharmaceuticals and medical supplies, healthcare management software, and various technology solutions aimed at improving patient care and operational efficiency across the healthcare continuum.

How the Company Makes Money

McKesson 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 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

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

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

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.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	359.05B	359.05B	308.95B	276.71B	263.97B	238.23B
Gross Profit	13.32B	12.48B	12.20B	11.87B	12.65B	11.58B
EBITDA	5.26B	5.25B	4.67B	5.74B	3.11B	-3.60B
Net Income	3.29B	3.29B	3.00B	3.56B	1.11B	-4.54B
Balance Sheet
Total Assets	75.14B	75.14B	67.44B	62.32B	63.30B	65.02B
Cash, Cash Equivalents and Short-Term Investments	5.69B	5.69B	4.58B	4.68B	3.53B	6.28B
Total Debt	7.39B	7.39B	7.39B	7.29B	7.54B	9.40B
Total Liabilities	76.83B	76.83B	69.04B	63.81B	65.09B	63.57B
Stockholders Equity	-2.07B	-2.07B	-1.97B	-1.86B	-2.27B	-21.00M
Cash Flow
Free Cash Flow	5.23B	5.23B	3.63B	4.60B	3.90B	3.90B
Operating Cash Flow	6.08B	6.08B	4.31B	5.16B	4.43B	4.54B
Investing Cash Flow	-733.00M	-733.00M	-1.07B	-542.00M	-89.00M	-415.00M
Financing Cash Flow	-3.96B	-3.96B	-3.34B	-4.37B	-6.32B	-1.69B

McKesson Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 659.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCK, the sentiment is Negative. The current price of 659.01 is below the 20-day moving average (MA) of 700.30, below the 50-day MA of 711.83, and above the 200-day MA of 648.53, indicating a neutral trend. The MACD of -11.70 indicates Positive momentum. The RSI at 31.92 is Neutral, neither overbought nor oversold. The STOCH value of 30.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCK.

McKesson Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCK	69 Neutral	$83.68B	26.84	51.23%	0.43%	20.35%	11.96%
Sector *	65 Neutral	¥341.96B	10.87	-0.16%	2.41%	10.05%	-9.84%
PBH	64 Neutral	$3.21B	15.32	12.05%	―	0.63%	4.23%
CAH	63 Neutral	$37.63B	24.62	-43.80%	1.39%	-1.94%	85.70%
COR	61 Neutral	$56.36B	29.90	130.60%	0.75%	11.56%	5.31%
HSIC	61 Neutral	$8.02B	21.26	11.18%	―	2.29%	14.98%
OMI	44 Neutral	$354.72M	―	-144.11%	―	-17.10%	-2720.40%

McKesson Corporate Events

McKesson Holds Annual Shareholders Meeting, Key Decisions Made

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.

The most recent analyst rating on (MCK) stock is a Buy with a $579.00 price target. To see the full list of analyst forecasts on McKesson stock, see the MCK Stock Forecast page.

McKesson Updates Fiscal Year 2026 Financial Outlook

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.

The most recent analyst rating on (MCK) stock is a Hold with a $540.00 price target. To see the full list of analyst forecasts on McKesson stock, see the MCK Stock Forecast page.

McKesson Issues $2 Billion Notes for Acquisition

On May 30, 2025, McKesson Corporation issued $2 billion in unsecured and unsubordinated notes with varying interest rates due in 2030, 2032, and 2035. The proceeds will fund the acquisition of a 70% controlling interest in Community Oncology Revitalization Enterprise Ventures, LLC, indicating a strategic move to expand its footprint in oncology services.

The most recent analyst rating on (MCK) stock is a Hold with a $540.00 price target. To see the full list of analyst forecasts on McKesson stock, see the MCK Stock Forecast page.