Citi initiated coverage of McKesson with a Buy rating and $420 price target. The analyst started the drug distribution sector with a positive bias, naming McKesson its top pick and AmerisourceBergen a "close second." The firm views the sector as safe haven in the currently challenged macro environment, with "unrivaled" cash generation and return on invested capital profiles. The big three distributors should be able to offset headwinds from generic price deflation and waning pandemic tailwinds to deliver high single-digit to low double-digit EBIT, contends Citi.
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Read More on MCK:
- McKesson price target raised to $426 from $420 at Morgan Stanley
- McKesson price target raised to $450 from $445 at Baird
- McKesson raises FY23 EPS view to $25.75-$26.15 from $24.45-$24.95
- McKesson reports Q3 adjusted EPS $6.90, consensus $6.35
- McKesson options imply 2.6% move in share price post-earnings
