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McKesson
(NYSE:MCK)
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Rating:70Outperform
Price Target:
$907.00
▲(7.86% Upside)
Action:Upgraded
Date:07/25/26
The score is driven primarily by strong financial momentum (rapid top-line expansion and a sustained profitability rebound), supported by constructive technicals (price above key short- and mid-term averages with positive MACD). Offsetting factors are valuation that is not especially compelling (P/E ~21 and very low dividend yield) and earnings-call risks around cash flow/interest headwinds and separation-related execution variability despite solid FY2027 growth guidance.
Positive Factors
Scale & Revenue Growth
Sustained, large-scale revenue growth underscores McKesson’s dominant distribution scale and broad customer relationships. That scale supports durable purchasing leverage with manufacturers, high fixed-cost absorption across logistics, and resilience to demand shifts — advantages that persist over multiple quarters.
Negative Factors
Structurally Thin Margins
Very low gross and net margins mean limited slack for cost inflation, pricing pressure, or mix shifts. Even modest declines in purchasing spreads or increased operating costs can disproportionately erode earnings, making profitability sensitive despite high revenue scale and increasing the importance of higher‑margin specialty growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & Revenue Growth
Sustained, large-scale revenue growth underscores McKesson’s dominant distribution scale and broad customer relationships. That scale supports durable purchasing leverage with manufacturers, high fixed-cost absorption across logistics, and resilience to demand shifts — advantages that persist over multiple 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
$100.24B
Dividend Yield0.38%
Average Volume (3M)1.05M
Price to Earnings (P/E)22.2
Beta (1Y)0.18
Revenue Growth12.36%
EPS Growth48.80%
CountryUS
Employees43,000
SectorHealthcare
Sector Strength45
IndustryMedical - Distribution
Share Statistics
EPS (TTM)38.64
Shares Outstanding117,077,740
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 Ratio18.70
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
$937.09Price Target Upside11.44% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)44.26
Revenue Forecast (FY)$431.21B
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:May 07, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
McKesson reported a strong fiscal 2026 with double-digit revenue, operating profit and EPS growth, robust cash generation and material progress on strategic initiatives (oncology expansion, biopharma scale, supply chain modernization, and Medical‑Surgical separation). The company is returning significant capital to shareholders and reaffirmed long‑term targets. Offsetting risks include branded pricing pressure (IRA effects), sequential GLP‑1 volatility, ongoing integration and corporate expense investments, and near‑term cash flow/interest impacts related to separation financing. On balance the positives (broad-based growth, margin expansion, cash returns, strategic progress) outweigh the negatives, though the business faces near-term variability and execution/approval risks tied to the Medical‑Surgical separation.Positive Updates
Strong Full-Year Financial Performance
Consolidated fiscal 2026 revenues of $403.0 billion, up 12% year-over-year; adjusted operating profit grew 15% to $6.5 billion; adjusted earnings per diluted share increased 18% to $39.11 (20% ex-McKesson Ventures fiscal 2025 gains).
Negative Updates
Branded Pricing Pressure and Revenue Drag
Branded pharmaceutical price declines reduced year-over-year revenue growth by ~3% in the quarter; management noted IRA-related branded price changes that dampened revenue growth even as operating profit remained resilient.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Full-Year Financial Performance
Consolidated fiscal 2026 revenues of $403.0 billion, up 12% year-over-year; adjusted operating profit grew 15% to $6.5 billion; adjusted earnings per diluted share increased 18% to $39.11 (20% ex-McKesson Ventures fiscal 2025 gains).
Read all positive updates
Company Guidance
McKesson guided fiscal 2027 adjusted earnings per diluted share of $43.80–$44.60 (12%–14% y/y; excluding a $1B Norway revenue and a $51M gain implies 14%–16% growth), with consolidated revenue growth of 5%–9% and adjusted operating profit up 8%–12%. By segment the company expects North American Pharmaceutical revenue +4%–8% and operating profit +5.5%–9.5%; Oncology & Multispecialty revenue +14.5%–18.5% and operating profit +13.5%–17.5%; Prescription Technology Solutions revenue +2.5%–6.5% and operating profit +11%–15%; Medical‑Surgical Solutions revenue +1%–6% and operating profit flat to +4%. Other guidance items include corporate expenses of $580M–$640M, interest expense $380M–$420M, income attributable to noncontrolling interest $295M–$325M, an effective tax rate of 17%–19%, free cash flow of ~$4.5B–$4.9B, ~ $5B of planned share repurchases (implying 116–118M weighted average diluted shares), and reaffirmation of long‑term targets: adjusted EPS growth 13%–16% and segment operating profit growth ranges (NAP 5%–8%, Oncology 13%–16%, RxTS 10%–13%).McKesson Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
58
Neutral
Cash Flow
62
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 403.43B | 359.05B | 308.95B | 276.71B | 263.97B |
| Gross Profit | 14.55B | 12.48B | 12.20B | 11.87B | 12.65B |
| EBITDA | 7.18B | 5.25B | 4.67B | 5.74B | 3.11B |
| Net Income | 4.76B | 3.29B | 3.00B | 3.56B | 1.11B |
Balance Sheet | |||||
| Total Assets | 82.32B | 75.14B | 67.44B | 62.32B | 63.30B |
| Cash, Cash Equivalents and Short-Term Investments | 3.98B | 5.69B | 4.58B | 4.68B | 3.53B |
| Total Debt | 8.61B | 7.39B | 7.39B | 7.29B | 7.54B |
| Total Liabilities | 83.16B | 76.83B | 69.04B | 63.81B | 65.09B |
| Stockholders Equity | -2.17B | -2.07B | -1.97B | -1.86B | -2.27B |
Cash Flow | |||||
| Free Cash Flow | 5.72B | 5.23B | 3.63B | 4.60B | 3.90B |
| Operating Cash Flow | 6.16B | 6.08B | 4.31B | 5.16B | 4.43B |
| Investing Cash Flow | -3.43B | -733.00M | -1.07B | -542.00M | -89.00M |
| Financing Cash Flow | -4.63B | -3.96B | -3.34B | -4.37B | -6.32B |
McKesson Technical Analysis
Positive
840.90
Price Trends
789.94
Positive
816.78
Positive
834.68
Positive
Market Momentum
22.69
Negative
59.43
Neutral
62.50
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 840.9 is above the 20-day moving average (MA) of 829.66, above the 50-day MA of 789.94, and above the 200-day MA of 834.68, indicating a bullish trend. The MACD of 22.69 indicates Negative momentum. The RSI at 59.43 is Neutral, neither overbought nor oversold. The STOCH value of 62.50 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.50B | 46.51 | 27.21% | ― | 13.54% | ― | |
70 Outperform | $100.24B | 22.16 | -265.44% | 0.39% | 12.36% | 48.80% | |
70 Outperform | $2.38B | 12.75 | 10.29% | ― | -4.31% | -8.94% | |
63 Neutral | $53.87B | 35.07 | -55.72% | 0.90% | 12.80% | 2.04% | |
62 Neutral | $60.57B | 23.73 | 115.93% | 0.76% | 5.95% | 51.04% | |
62 Neutral | $9.77B | 25.67 | 11.86% | ― | 5.64% | 2.92% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
MCK
McKesson
856.19
148.13
20.92%
COR
Cencora
311.34
19.90
6.83%
CAH
Cardinal Health
230.03
73.04
46.53%
HSIC
Henry Schein
85.75
15.73
22.47%
PBH
Prestige Consumer Healthcare
50.22
-23.98
-32.32%
GRDN
Guardian Pharmacy Services, Inc. Class A
39.53
19.27
95.11%
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...
Business Operations and StrategyPrivate Placements and Financing
McKesson Secures New $5 Billion Revolving Credit Facility
Positive
Apr 28, 2026
On April 24, 2026, McKesson entered into a new $5.0 billion senior unsecured revolving credit facility maturing in April 2031, replacing its prior $1.0 billion 364-day facility and $4.0 billion five-year facility, both of which had no outstanding ...
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.