McKesson (MCK) AI Stock Analysis

• Market Cap: $88.66B
• Dividend Yield: 0.49%
• Average Volume (3M): 659.11K
• Price to Earnings (P/E): 27.6
• Beta (1Y): 0.26
• Revenue Growth: 16.22%
• EPS Growth: 15.29%
• Country: US
• Employees: 44,000
• Sector: Healthcare
• Sector Strength: 37
• Industry: Medical - Distribution
• EPS (TTM): 10.12
• Shares Outstanding: 124,903,700
• 10 Day Avg. Volume: 542,085
• 30 Day Avg. Volume: 659,110
• PEG Ratio: 1.48
• Price to Book (P/B): -42.92
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.83
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 0.07
• Enterprise Value/Gross Profit: 6.79
• Enterprise Value/Ebitda: 4.44
• 1Y Price Target: $793.00
• Price Target Upside: 11.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 79 Outperform
• Price Target: $813.00 ▲(14.59%Upside)

McKesson's overall stock score reflects strong financial performance driven by robust revenue and EPS growth, supported by strategic acquisitions and effective cash flow management. However, high leverage and valuation concerns moderate the score, while technical indicators suggest cautious short-term sentiment.

Positive Factors

Acquisition Impact

The completion of the acquisition of a 70% stake in Core Ventures shifts focus away from deal timing and back to core results, highlighting positive developments for McKesson.

Earnings Guidance

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

Divestiture Uncertainty

There are lingering investor questions regarding the timing of McKesson's plan to divest its Medical Surgical business.

Drug Pricing Concerns

The Most-Favored-Nation Drug Pricing Executive Order has generated some investor concern, with potential neutral to negative impact on distributors.

McKesson Business Overview & Revenue Model

Company Description

McKesson Corporation is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology. With its headquarters in Irving, Texas, McKesson serves as a crucial link in the healthcare delivery chain, providing pharmaceuticals, medical supplies, and information technology solutions that help healthcare providers improve patient care and outcomes. The company operates in various segments, including U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions, Medical-Surgical Solutions, and others, catering to a wide range of healthcare customers, from individual pharmacies to large hospital systems.

How the Company Makes Money

McKesson makes money primarily through the distribution of pharmaceuticals and medical products. The U.S. Pharmaceutical and Specialty Solutions segment is the largest contributor to its revenue, accounting for a significant portion of the company's income by distributing branded and generic pharmaceutical drugs to retail pharmacies, hospitals, and health systems across the United States. The Medical-Surgical Solutions segment contributes by distributing medical-surgical supplies and equipment to healthcare providers. Additionally, McKesson generates revenue through its European Pharmaceutical Solutions segment, which focuses on the distribution of pharmaceuticals in European markets. The company also derives income from technology services, offering software and automation solutions that help healthcare facilities manage their operations more effectively. Strategic partnerships with manufacturers, healthcare providers, and government entities play a critical role in McKesson's operations, allowing the company to maintain a robust supply chain and expand its reach in the global healthcare market.

McKesson Financial Statement Overview

Summary

McKesson exhibits strong revenue growth and 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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	359.05B	308.95B	276.71B	263.97B	238.23B
Gross Profit	13.32B	12.58B	12.36B	13.13B	12.15B
EBITDA	5.26B	4.67B	5.74B	3.11B	-3.60B
Net Income	3.29B	3.00B	3.56B	1.11B	-4.34B
Balance Sheet
Total Assets	75.14B	67.44B	62.32B	63.30B	65.02B
Cash, Cash Equivalents and Short-Term Investments	5.69B	4.58B	4.68B	3.53B	6.28B
Total Debt	7.39B	7.39B	7.29B	7.54B	9.40B
Total Liabilities	76.83B	69.04B	63.81B	65.09B	63.57B
Stockholders Equity	-2.07B	-1.97B	-1.86B	-2.27B	-21.00M
Cash Flow
Free Cash Flow	6.08B	3.63B	4.60B	3.90B	3.90B
Operating Cash Flow	6.08B	4.31B	5.16B	4.43B	4.54B
Investing Cash Flow	-733.00M	-1.07B	-542.00M	-89.00M	-415.00M
Financing Cash Flow	-3.96B	-3.34B	-4.37B	-6.32B	-1.69B

McKesson Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 709.47
• 50DMA: Negative
• 100DMA: Positive
• 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 709.47 is below the 20-day moving average (MA) of 718.30, below the 50-day MA of 715.39, and above the 200-day MA of 633.74, indicating a neutral trend. The MACD of -1.79 indicates Positive momentum. The RSI at 45.86 is Neutral, neither overbought nor oversold. The STOCH value of 31.83 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	79 Outperform	$88.66B	27.59	51.23%	0.49%	16.22%	15.29%
COR	76 Outperform	$56.77B	33.99	161.58%	0.74%	12.18%	-5.92%
HSIC	74 Outperform	$8.41B	21.47	11.78%	―	1.75%	8.76%
CAH	70 Outperform	$38.08B	24.92	-43.80%	1.61%	0.78%	183.45%
PBH	69 Neutral	$3.73B	17.63	12.30%	―	1.10%	2.65%
OMI	52 Neutral	$593.76M	―	-49.91%	―	2.84%	-828.91%
Sector *	50 Neutral	AU$2.61B	3.12	-57.47%	2.45%	36.73%	13.67%

McKesson Corporate Events

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.