McKesson (MCK) AI Stock Analysis

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McKesson

(NYSE:MCK)

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Neutral 62 (OpenAI - 4o)

Rating:62Neutral

Price Target:

$846.00

▲(3.85% Upside)

McKesson's overall stock score reflects a strong earnings call performance and solid cash flow generation, which are offset by significant leverage concerns and bearish technical indicators. The company's raised guidance and strategic focus on high-growth areas are positive, but the financial instability and low profitability margins pose risks.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Strategic Restructuring

Restructuring to focus on high-growth segments like oncology and biopharma services positions McKesson for sustained competitive advantage.

Cash Flow Generation

Robust cash flow generation enhances McKesson's ability to invest in growth opportunities and manage debt, supporting long-term viability.

Negative Factors

Profitability Margins

Decreasing margins may limit McKesson's ability to reinvest in its business and maintain competitive pricing, impacting future profitability.

Leverage Concerns

Significant leverage can constrain financial flexibility and increase risk, potentially affecting McKesson's long-term financial health.

Medical-Surgical Segment Challenges

Stagnant performance in this segment could hinder overall growth and necessitate strategic adjustments to improve profitability.

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

Market Cap

$100.55B

Dividend Yield0.37%

Average Volume (3M)653.75K

Price to Earnings (P/E)25.4

Beta (1Y)0.29

Revenue Growth17.23%

EPS Growth66.17%

CountryUS

Employees44,000

SectorHealthcare

Sector Strength45

IndustryMedical - Distribution

Share Statistics

EPS (TTM)9.86

Shares Outstanding123,426,650

10 Day Avg. Volume432,886

30 Day Avg. Volume653,747

Financial Highlights & Ratios

PEG Ratio1.77

Price to Book (P/B)-41.34

Price to Sales (P/S)0.24

P/FCF Ratio16.41

Enterprise Value/Market Cap1.02

Enterprise Value/Revenue0.27

Enterprise Value/Gross Profit7.94

Enterprise Value/Ebitda17.50

Forecast

1Y Price Target

$942.83

Price Target Upside15.74% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering13

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

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 the distribution of pharmaceuticals and medical supplies. The company's key revenue streams include the wholesale distribution of branded and generic pharmaceuticals to pharmacies, hospitals, and other healthcare providers, which constitutes a significant portion of its total revenue. Additionally, McKesson provides integrated healthcare management solutions, generating revenue from software services and consulting. The company benefits from long-term contracts with large healthcare systems and partnerships with pharmaceutical manufacturers, enhancing its pricing power and operational efficiency. Furthermore, McKesson's participation in specialty pharmacy services and value-based care initiatives diversifies its income sources and supports its overall growth strategy.

McKesson Key Performance Indicators (KPIs)

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 is experiencing robust growth, with a notable 25% revenue increase, driven by higher prescription volumes and specialty product distribution. This aligns with the company's strategic focus on the U.S. market, as evidenced by their exit from European operations. The Prescription Technology Solutions segment also shows strong momentum, with 16% revenue growth fueled by demand for access and affordability solutions. Strategic acquisitions are expected to further boost operating profit, despite challenges like Rite Aid's bankruptcy. Overall, McKesson's raised guidance reflects confidence in sustained growth.

Data provided by:

The Fly

McKesson Earnings Call Summary

Earnings Call Date:Nov 05, 2025

(Q2-2026)

% Change Since: |

Next Earnings Date:Feb 04, 2026

Earnings Call Sentiment Positive

McKesson reported strong financial performance with significant growth in revenue and earnings, driven by robust performance in oncology and multispecialty segments and prescription technology solutions. The company raised its earnings guidance, reflecting confidence in continued growth. However, challenges in the Medical-Surgical Solutions segment present some concerns. Overall, the strengths significantly outweigh the challenges.

Q2-2026 Updates

Positive Updates

Strong Revenue and Earnings Growth

Consolidated revenues increased 10% year-over-year to $103 billion, with adjusted earnings per diluted share increasing 39% to $9.86. Three segments delivered double-digit adjusted operating profit growth.

Oncology and Multispecialty Segment Success

Revenues increased 32% to $12 billion, driven by strong provider and specialty distribution growth, including acquisitions. Operating profit increased 71% to $397 million.

Prescription Technology Solutions Growth

Revenues increased 9% to $1.4 billion, with operating profit rising 20% to $261 million due to increased demand for access solutions and prior authorization services.

Increased Earnings Guidance

Guidance for adjusted earnings per diluted share raised to $38.35 - $38.85, representing 16% to 18% growth over the prior year.

Successful Implementation of New Reporting Structure

Introduction of new reporting structure enhances transparency and aligns with strategic growth areas, particularly in oncology and biopharma services.

Negative Updates

Challenges in Medical-Surgical Solutions

Revenues were flat compared to the prior year, with a 4% headwind from seasonal vaccines and testing volumes. Operating profit increased only 2% due to operational efficiencies offset by lower illness season product contributions.

Potential Future Separation of Medical-Surgical Business

Plans to separate the Medical-Surgical Solutions business through an IPO, targeting completion by the second half of calendar 2027, subject to market conditions.

Company Guidance

During McKesson's second quarter fiscal 2026 earnings call, the company reported strong financial performance, with consolidated revenues increasing by 10% year-over-year to $103 billion and adjusted earnings per diluted share rising by 39% to $9.86. Three of McKesson's segments achieved double-digit adjusted operating profit growth, showcasing the company's successful execution of strategic priorities. Based on this robust performance and a positive outlook for the year, McKesson raised its guidance for adjusted earnings per diluted share to a range of $38.35 to $38.85, building on a previous $0.80 increase announced in September. This upward revision underscores the company's confidence in its diversified portfolio and strategic initiatives, including the formation of new reporting structures like the oncology and multispecialty segment and the North American Pharmaceutical segment, aimed at optimizing portfolio management and driving long-term shareholder value.

McKesson Financial Statement Overview

Summary

McKesson shows solid revenue growth and strong cash flow generation, with a free cash flow growth of 11.30%. However, profitability margins are under pressure, and there are significant leverage concerns with a high debt-to-equity ratio of -5.05. The negative stockholders' equity and low net profit margin of 0.84% indicate financial instability.

Income Statement

McKesson's income statement shows a consistent revenue growth trend, with a TTM revenue growth rate of 2.52%. However, margins have been under pressure, with a declining gross profit margin from 4.97% in 2022 to 3.33% in TTM. The net profit margin is relatively low at 0.84%, indicating thin profitability. Despite these challenges, the company has managed to maintain positive EBIT and EBITDA margins.

Balance Sheet

The balance sheet reveals significant leverage concerns, with a negative stockholders' equity leading to a high debt-to-equity ratio of -5.05 in TTM. This indicates potential financial instability. The return on equity is negative, reflecting challenges in generating returns for shareholders. The equity ratio is also negative, highlighting the company's reliance on debt financing.

Cash Flow

Cash flow analysis shows strong free cash flow growth of 11.30% in TTM, indicating robust cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio of 0.88 further supports the company's ability to generate cash relative to its net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	387.09B	359.05B	308.95B	276.71B	263.97B	238.23B
Gross Profit	12.96B	12.48B	12.20B	11.87B	12.65B	11.58B
EBITDA	5.88B	5.25B	4.67B	5.74B	3.11B	-3.60B
Net Income	4.03B	3.29B	3.00B	3.56B	1.11B	-4.54B
Balance Sheet
Total Assets	84.16B	75.14B	67.44B	62.32B	63.30B	65.02B
Cash, Cash Equivalents and Short-Term Investments	4.11B	5.69B	4.58B	4.68B	3.53B	6.28B
Total Debt	9.79B	7.39B	7.39B	7.29B	7.54B	9.40B
Total Liabilities	84.74B	76.83B	69.04B	63.81B	65.09B	63.57B
Stockholders Equity	-1.74B	-2.07B	-1.97B	-1.86B	-2.27B	-21.00M
Cash Flow
Free Cash Flow	6.39B	5.23B	3.63B	4.60B	3.90B	3.90B
Operating Cash Flow	6.87B	6.08B	4.31B	5.16B	4.43B	4.54B
Investing Cash Flow	-3.95B	-733.00M	-1.07B	-542.00M	-89.00M	-415.00M
Financing Cash Flow	-1.34B	-3.96B	-3.34B	-4.37B	-6.32B	-1.69B

McKesson Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price814.63

Price Trends

50DMA

832.23

Negative

100DMA

781.47

Positive

200DMA

741.29

Positive

Market Momentum

MACD

-0.90

Negative

RSI

44.44

Neutral

STOCH

59.57

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCK, the sentiment is Neutral. The current price of 814.63 is below the 20-day moving average (MA) of 820.15, below the 50-day MA of 832.23, and above the 200-day MA of 741.29, indicating a neutral trend. The MACD of -0.90 indicates Negative momentum. The RSI at 44.44 is Neutral, neither overbought nor oversold. The STOCH value of 59.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
HSIC	72 Outperform	$9.30B	24.96	11.39%	―	3.51%	29.65%
COR	70 Neutral	$65.13B	42.16	144.31%	0.66%	9.31%	5.92%
CAH	66 Neutral	$48.11B	30.36	―	0.98%	4.37%	28.48%
PBH	66 Neutral	$3.08B	15.87	11.29%	―	-0.02%	-1.87%
MCK	62 Neutral	$100.55B	25.41	―	0.37%	17.23%	66.17%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

* Healthcare Sector Average

Performance Comparison

MCK

McKesson

814.63

235.34

40.63%

COR

Cencora

335.74

101.36

43.25%

CAH

Cardinal Health

202.49

82.43

68.66%

HSIC

Henry Schein

79.00

9.33

13.39%

PBH

Prestige Consumer Healthcare

63.96

-10.04

-13.57%

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: Dec 09, 2025