McKesson (MCK) AI Stock Analysis

• Market Cap: $88.19B
• Dividend Yield: 0.4%
• Average Volume (3M): 983.50K
• Price to Earnings (P/E): 27.4
• Beta (1Y): 0.27
• Revenue Growth: 16.22%
• EPS Growth: 15.29%
• Country: US
• Employees: 44,000
• Sector: Healthcare
• Sector Strength: 44
• Industry: Medical - Distribution
• EPS (TTM): 10.12
• Shares Outstanding: 125,112,236
• 10 Day Avg. Volume: 738,016
• 30 Day Avg. Volume: 983,503
• PEG Ratio: -14.64
• Price to Book (P/B): 2.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.71
• Enterprise Value/Market Cap: 0.32
• Enterprise Value/Revenue: 0.02
• Enterprise Value/Gross Profit: 2.13
• Enterprise Value/Ebitda: 1.38
• 1Y Price Target: $776.43
• Price Target Upside: 8.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 76 Outperform
• Price Target: $813.00 ▲(13.27%Upside)

McKesson's overall score is driven by strong financial performance and positive earnings call outcomes, despite valuation concerns and balance sheet risks. Strategic acquisitions and a focus on core business segments bolster future growth prospects.

Positive Factors

Acquisitions

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.

Operational Performance

Strong and steady operational performance has led to an encouraging FY26 EPS raise.

Negative Factors

Divestiture Uncertainty

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

Regulatory 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 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 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 demonstrates strong revenue growth and improved profitability, supported by robust cash flow generation. However, negative equity and high leverage in the balance sheet pose potential risks, necessitating careful management of financial stability.

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
	EBIT
4.42B	3.91B	4.38B	2.85B	3.52B
	EBITDA
5.26B	4.67B	5.74B	3.11B	-3.60B
	Net Income Common Stockholders
3.29B	3.00B	3.56B	1.11B	-4.34B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.69B	4.58B	4.68B	3.53B	6.28B
	Total Assets
75.14B	67.44B	62.32B	63.30B	65.02B
	Total Debt
7.39B	7.39B	7.29B	7.54B	9.40B
	Net Debt
1.70B	2.81B	2.62B	4.01B	3.13B
	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: Positive
• Last Price: 717.76
• 50DMA: Positive
• 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 Positive. The current price of 717.76 is above the 20-day moving average (MA) of 713.11, above the 50-day MA of 700.61, and above the 200-day MA of 606.44, indicating a bullish trend. The MACD of 3.71 indicates Positive momentum. The RSI at 55.96 is Neutral, neither overbought nor oversold. The STOCH value of 43.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCK.

McKesson Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COR	78 Outperform	$55.09B	32.99	161.58%	0.77%	12.18%	-5.92%
CNC	77 Outperform	$27.62B	8.23	12.59%	―	8.85%	33.30%
MCK	76 Outperform	$88.19B	27.40	51.23%	0.40%	16.22%	15.29%
HCA	76 Outperform	$87.79B	16.21	-230.22%	0.79%	7.30%	11.60%
CAH	70 Outperform	$36.54B	23.91	-43.80%	1.32%	0.78%	183.45%
CVS	69 Neutral	$81.29B	15.35	7.00%	4.14%	4.84%	-26.54%
Sector *	54 Neutral	$5.38B	3.40	-45.06%	3.28%	16.75%	-0.02%

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.