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McKesson
(NYSE:MCK)
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Rating:66Neutral
Price Target:
$906.00
▲(0.10% Upside)
Action:Downgraded
Date:08/21/26
The score is driven primarily by strong cash generation and a bullish earnings call featuring raised FY2027 EPS guidance and broad segment strength. Offsetting these positives are a structurally weak balance sheet (persistent negative equity) and a valuation profile that is not clearly compelling (P/E ~22.35 and low dividend yield), while technical indicators are neutral-to-mixed.
Positive Factors
Scale and Revenue Growth
McKesson’s enormous distribution scale and sustained revenue expansion support customer reach, purchasing leverage and network efficiency. Continued volume growth across pharmaceuticals and healthcare services provides a durable foundation for earnings over the next several quarters.
Negative Factors
Persistently Negative Stockholders’ Equity
Negative equity reduces balance-sheet flexibility and makes leverage and return metrics harder to interpret. It leaves less accounting cushion in a downside scenario, particularly if operating conditions weaken or separation-related obligations increase.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale and Revenue Growth
McKesson’s enormous distribution scale and sustained revenue expansion support customer reach, purchasing leverage and network efficiency. Continued volume growth across pharmaceuticals and healthcare services provides a durable foundation for earnings over the next several quarters.
Read all positive factors
McKesson Key Performance Indicators (KPIs)
Any
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.
Shows how revenue is distributed across various business segments, indicating which areas are growing or declining and where the company is focusing its efforts.
Data provided by:
The Fly
The FlyMcKesson (MCK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$101.88B
Dividend Yield0.36%
Average Volume (3M)1.05M
Price to Earnings (P/E)23.3
Beta (1Y)0.21
Revenue Growth8.84%
EPS Growth48.98%
CountryUS
Employees42,300
SectorHealthcare
Sector Strength45
IndustryMedical - Distribution
Share Statistics
EPS (TTM)37.53
Shares Outstanding116,590,360
10 Day Avg. Volume868,018
30 Day Avg. Volume1,049,213
Financial Highlights & Ratios
PEG Ratio0.46
Price to Book (P/B)-49.24
Price to Sales (P/S)0.27
P/FCF Ratio19.77
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$987.75Price Target Upside9.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)44.63
Revenue Forecast (FY)$431.98B
McKesson Business Overview & Revenue Model
Company Description
McKesson Corporation is a prominent global provider of healthcare services, operating extensively in both the United States and international markets. Its diverse operations are strategically organized into four key business segments. The U.S. Pha...
How the Company Makes Money
McKesson makes money primarily by distributing pharmaceuticals and earning a gross profit spread (and related fees) between what it pays manufacturers and what it charges customers such as retail pharmacies, hospitals/health systems, and other pro...
McKesson Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call communicated strong operational momentum: double-digit EPS growth, an 8% revenue increase to $105.4B, broad-based segment strength (notably Oncology & Multispecialty and North American Pharmaceuticals), improved gross profit and operating leverage, a raised full-year EPS guide, active capital returns (large buyback and dividend increase), and continued strategic progress on the MedSurg separation and tech/AI initiatives. Lowlights included a quarterly negative free cash flow readout (seasonal but improved vs prior year), a 20% decline in MedSurg operating profit, financing-related interest expense and GAAP remeasurement charges, and macro/regulatory uncertainties (WAC reductions, branded-to-generic conversions, 340B/IRA policy risks). Overall, the positive operational and financial beats and raised guidance materially outweigh the noted one-offs, financing costs, and policy risks.Positive Updates
Top-Line and EPS Outperformance
Revenues increased 8% year-over-year to $105.4 billion and adjusted EPS rose 20% to $9.93, both results exceeded expectations. Management raised full-year adjusted EPS guidance to $44.20–$45.00 (implying ~13–15% adjusted EPS growth).
Negative Updates
Medical Surgical Solutions Operating Profit Decline
MedSurg operating profit decreased 20% year-over-year to $195 million, driven by product mix and a one-time administrative expense despite a 4% revenue increase to $2.8 billion.
Read all updates
Q1-2027 Updates
Positive
Negative
Top-Line and EPS Outperformance
Revenues increased 8% year-over-year to $105.4 billion and adjusted EPS rose 20% to $9.93, both results exceeded expectations. Management raised full-year adjusted EPS guidance to $44.20–$45.00 (implying ~13–15% adjusted EPS growth).
Read all positive updates
Company Guidance
McKesson raised its fiscal 2027 adjusted EPS guidance to $44.20–$45.00 (from $43.80–$44.60) — implying roughly 13%–15% adjusted EPS growth (or 15%–17% on an alternate FY26 basis) — and now expects revenue growth of 5%–9% and operating profit growth of 9%–13% for the year. Segment guidance: North American Pharmaceuticals revenue +4%–8% (operating profit toward the high end of the prior 5.5%–9.5% range), Oncology & Multispecialty revenue +14.5%–18.5% (op profit +13.5%–17.5%), Prescription Technology Solutions revenue +2.5%–6.5% (op profit +11%–15%), and MedSurg revenue +1%–6% (op profit flat to +4%). Below‑the‑line and cash items include corporate expenses of $580–$640M, interest expense $380–$420M, income attributable to noncontrolling interest $295–$325M, an effective tax rate of 18%–19%, expected free cash flow of ~$4.5–$4.9B, ~ $5B of planned share repurchases ( ~$2.5B completed in Q1), and estimated diluted shares of 115.5–117.5M.McKesson Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
38
Negative
Cash Flow
81
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 410.98B | 403.43B | 359.05B | 308.95B | 276.71B | 263.97B |
| Gross Profit | 14.96B | 14.55B | 12.48B | 12.20B | 11.87B | 12.65B |
| EBITDA | 7.14B | 7.18B | 5.25B | 4.67B | 5.74B | 3.11B |
| Net Income | 4.59B | 4.76B | 3.29B | 3.00B | 3.56B | 1.11B |
Balance Sheet | ||||||
| Total Assets | 88.33B | 82.32B | 75.14B | 67.44B | 62.32B | 63.30B |
| Cash, Cash Equivalents and Short-Term Investments | 5.16B | 3.98B | 5.69B | 4.58B | 4.68B | 3.53B |
| Total Debt | 11.70B | 8.61B | 7.39B | 7.39B | 7.29B | 7.54B |
| Total Liabilities | 92.19B | 83.16B | 76.83B | 69.04B | 63.81B | 65.09B |
| Stockholders Equity | -4.24B | -2.17B | -2.07B | -1.97B | -1.86B | -2.27B |
Cash Flow | ||||||
| Free Cash Flow | 6.18B | 5.41B | 5.23B | 3.63B | 4.60B | 3.90B |
| Operating Cash Flow | 6.85B | 6.16B | 6.08B | 4.31B | 5.16B | 4.43B |
| Investing Cash Flow | -82.00M | -3.43B | -733.00M | -1.07B | -542.00M | -89.00M |
| Financing Cash Flow | -4.17B | -4.63B | -3.96B | -3.34B | -4.37B | -6.32B |
McKesson Technical Analysis
Positive
905.09
Price Trends
825.40
Positive
811.17
Positive
840.15
Positive
Market Momentum
12.35
Positive
61.83
Neutral
62.65
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 905.09 is above the 20-day moving average (MA) of 866.57, above the 50-day MA of 825.40, and above the 200-day MA of 840.15, indicating a bullish trend. The MACD of 12.35 indicates Positive momentum. The RSI at 61.83 is Neutral, neither overbought nor oversold. The STOCH value of 62.65 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.46B | 14.49 | 9.22% | ― | -1.36% | -16.45% | |
70 Outperform | $61.78B | 24.26 | 115.93% | 0.76% | 5.09% | 38.10% | |
69 Neutral | $9.98B | 25.91 | 12.37% | ― | 6.49% | 10.41% | |
69 Neutral | $2.39B | 35.90 | 30.80% | ― | 10.31% | ― | |
66 Neutral | $101.88B | 23.28 | -194.39% | 0.39% | 8.84% | 48.98% | |
65 Neutral | $54.04B | 31.96 | -59.73% | 0.90% | 14.23% | 12.28% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
MCK
McKesson
905.09
227.33
33.54%
COR
Cencora
328.06
40.55
14.10%
CAH
Cardinal Health
237.92
91.95
62.99%
HSIC
Henry Schein
89.65
20.59
29.81%
PBH
Prestige Consumer Healthcare
51.45
-14.96
-22.53%
GRDN
Guardian Pharmacy Services, Inc. Class A
37.30
11.27
43.30%
McKesson Corporate Events
Executive/Board ChangesShareholder Meetings
McKesson Shareholders Back Board, Auditors, and Executive Pay
Positive
Jul 24, 2026
On July 22, 2026, McKesson Corporation held its Annual Meeting of Shareholders, at which all board-nominated directors were elected, including CEO Brian S. Tyler, despite receiving the highest level of opposition among nominees. The voting outcome...
Business Operations and StrategyExecutive/Board Changes
McKesson Appoints New Executive Vice President, Strategy Chief
Positive
Jul 1, 2026
McKesson announced a leadership change to support an orderly transition in its strategic direction, appointing Ramesh Srinivasan as Executive Vice President and Chief Strategy Officer, effective August 1, 2026. The move signals a strengthening of ...
Business Operations and StrategyPrivate Placements and Financing
McKesson Expands Capital Structure with New Term Loan
Positive
Jun 12, 2026
On June 9, 2026, McKesson subsidiaries including McKesson Medical-Surgical Top Holdings, Inc. amended an existing credit agreement to add a $2.25 billion senior secured term B loan facility maturing in 2032, with borrowings bearing interest at eit...
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.