McKesson price target lowered to $579 from $623 at Deutsche Bank

Deutsche Bank lowered the firm’s price target on McKesson to $579 from $623 and keeps a Buy rating on the shares. McKesson recently announced its plan to report fiscal Q2 earnings results on November 6, which the analyst calls “a slight deviation from the company’s three-year track record of reporting about five days earlier,” and also recently detailed plans to host an in-person analyst meeting the following day, November 7, in a break from its normal analyst phone call follow-ups. This behavior change and communication, which follows “low-quality” Q1 results and the company subsequently implying softness of about 10c-20c versus consensus in Q2 in a recent presentation, has “investors on edge – especially as relates to long-term growth targets,” the analyst contends. Thinking about what messages could be delivered at the event, which the analyst points out will not be webcast and will be limited to in-person attendance only, Deutsche’s fears “fall into two main buckets,” namely the company further reducing FY25 EPS guidance and the need to reduce its longer-term EPS guidance. The firm, which lowered the multiple it applies to its calendar 2025 EPS estimate of $35.07, views the stock “as likely in a holding pattern until after the Nov. 7 analyst event.”