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Mckesson Corp. (MCK)
NYSE:MCK
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McKesson
(NYSE:MCK)
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Rating:69Neutral
Price Target:
$763.00
▲(3.38% Upside)
McKesson's overall stock score is driven by strong earnings call results and solid financial performance, particularly in revenue growth and cash flow generation. However, high leverage and low profit margins present risks. The technical analysis suggests a neutral to slightly positive trend, while the valuation indicates potential overvaluation concerns.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust demand for McKesson's products and services, enhancing its market position and supporting long-term financial stability.
Strategic Acquisitions
Strategic acquisitions in high-growth areas like oncology enhance McKesson's service offerings and competitive edge, driving future profitability.
Operational Efficiency
Investments in automation improve operational efficiency, reducing costs and increasing margins, which supports long-term competitiveness and profitability.
Negative Factors
High Leverage
High leverage and negative equity position increase financial risk, potentially limiting McKesson's ability to invest in growth and weather economic downturns.
Low Profit Margins
Declining profit margins may hinder McKesson's ability to generate sufficient returns, impacting long-term financial health and shareholder value.
Impact of Rite Aid Bankruptcy
The financial impact from Rite Aid's bankruptcy highlights risks associated with customer concentration, potentially affecting McKesson's cash flow and profitability.
McKesson (MCK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$95.16B
Dividend Yield0.4%
Average Volume (3M)762.83K
Price to Earnings (P/E)30.5
Beta (1Y)0.30
Revenue Growth20.35%
EPS Growth11.96%
CountryUS
Employees44,000
SectorHealthcare
Sector Strength45
IndustryMedical - Distribution
Share Statistics
EPS (TTM)8.26
Shares Outstanding124,384,390
10 Day Avg. Volume955,457
30 Day Avg. Volume762,833
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit7.98
Enterprise Value/Ebitda19.33
Forecast
1Y Price Target
$835.08Price Target Upside13.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
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 its pharmaceutical distribution segment, which involves the sale of branded and generic pharmaceuticals to hospitals, pharmacies, and other healthcare providers. This segment accounts for a significant portion of the company's revenue, driven by the volume of drugs distributed and the associated service fees. Additionally, McKesson earns revenue from its medical-surgical distribution services, where it supplies medical supplies and equipment to healthcare facilities. Another key revenue stream comes from its technology solutions, which include software and services designed to streamline healthcare operations and enhance patient care delivery. The company also benefits from strategic partnerships with pharmaceutical manufacturers and healthcare providers, allowing it to optimize its supply chain, enhance service offerings, and tap into new markets. Overall, McKesson's diverse revenue model, supported by its scale and industry relationships, contributes to its financial stability and growth.
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:
Main Street Data
Main Street DataMcKesson Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
McKesson's fiscal first quarter results were strong, with record revenue growth and increased full-year guidance, driven by robust segment performance and strategic acquisitions. However, the company faced challenges such as the impact of Rite Aid's bankruptcy and a decrease in international operating profit due to divestitures.Q1-2026 Updates
Positive Updates
Record Revenue Growth
McKesson reported record consolidated revenues of $97.8 billion, an increase of 23% over the prior year.
Raised Full Year Guidance
The company raised its full year guidance to $37.10 to $37.90, up from the previous range of $36.90 to $37.70.
Strong Segment Performance
Three of McKesson's segments delivered double-digit growth in adjusted operating profit.
Oncology and Biopharma Services Expansion
Completed acquisition of a controlling interest in Core Ventures and PRISM Vision, expanding the oncology and ophthalmology platforms.
Prescription Technology Solutions Growth
The segment delivered double-digit growth in revenue and adjusted operating profit, driven by increased demand for access solutions.
U.S. Pharmaceutical Revenue Increase
U.S. Pharmaceutical revenues increased 25% to $90 billion, driven by increased prescription volumes and growth in oncology and specialty products.
Operational Efficiency Improvements
McKesson continues to improve operational leverage through automation investments, achieving up to 90% automation in some distribution centers.
Negative Updates
Impact of Rite Aid Bankruptcy
Recorded a GAAP-only pretax provision for bad debts of $189 million due to Rite Aid's second bankruptcy filing.
Challenges in the International Segment
International segment operating profit decreased by 3%, driven by the divestiture of the Canada-based Rexall and Well.ca businesses.
Company Guidance
During McKesson's First Quarter Fiscal 2026 Earnings Call, the company provided robust financial guidance, reflecting strong performance across its segments. The company reported a 23% increase in consolidated revenues to $97.8 billion, with adjusted operating profit rising by 9% to $1.4 billion. McKesson raised its full-year earnings guidance to a range of $37.10 to $37.90 per diluted share, up from the previous range of $36.90 to $37.70. The U.S. Pharmaceutical segment, a major contributor, saw a 25% revenue increase, largely driven by prescription volume growth and specialty products distribution. The Prescription Technology Solutions segment achieved a 16% revenue growth, bolstered by demand for access solutions, while the Medical-Surgical Solutions segment posted a 22% increase in operating profit due to cost optimization efforts. The International segment, despite facing divestitures, maintained stable performance. Additionally, McKesson's strategic acquisitions, such as PRISM Vision and Core Ventures, are expected to significantly contribute to the company's operating profit growth, reinforcing its commitment to long-term strategic priorities in oncology and biopharma services.McKesson Financial Statement Overview
Summary
McKesson demonstrates strong revenue growth and improved profitability, supported by robust cash flow generation. However, the balance sheet's negative equity and high leverage pose potential risks. Continued focus on improving operational efficiency and managing leverage will be crucial for sustainable growth.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.75
Positive
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.40
Negative
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.80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 377.60B | 359.05B | 308.95B | 276.71B | 263.97B | 238.23B |
| Gross Profit | 12.56B | 12.48B | 12.20B | 11.87B | 12.65B | 11.58B |
| EBITDA | 5.19B | 5.25B | 4.67B | 5.74B | 3.11B | -3.60B |
| Net Income | 3.16B | 3.29B | 3.00B | 3.56B | 1.11B | -4.54B |
Balance Sheet | ||||||
| Total Assets | 81.31B | 75.14B | 67.44B | 62.32B | 63.30B | 65.02B |
| Cash, Cash Equivalents and Short-Term Investments | 2.68B | 5.69B | 4.58B | 4.68B | 3.53B | 6.28B |
| Total Debt | 9.93B | 7.39B | 7.39B | 7.29B | 7.54B | 9.40B |
| Total Liabilities | 82.17B | 76.83B | 69.04B | 63.81B | 65.09B | 63.57B |
| Stockholders Equity | -1.97B | -2.07B | -1.97B | -1.86B | -2.27B | -21.00M |
Cash Flow | ||||||
| Free Cash Flow | 5.74B | 5.23B | 3.63B | 4.60B | 3.90B | 3.90B |
| Operating Cash Flow | 6.55B | 6.08B | 4.31B | 5.16B | 4.43B | 4.54B |
| Investing Cash Flow | -4.21B | -733.00M | -1.07B | -542.00M | -89.00M | -415.00M |
| Financing Cash Flow | -1.98B | -3.96B | -3.34B | -4.37B | -6.32B | -1.69B |
McKesson Technical Analysis
Positive
738.06
Price Trends
702.83
Positive
709.13
Positive
671.26
Positive
Market Momentum
17.03
Negative
54.72
Neutral
68.83
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 738.06 is above the 20-day moving average (MA) of 725.46, above the 50-day MA of 702.83, and above the 200-day MA of 671.26, indicating a bullish trend. The MACD of 17.03 indicates Negative momentum. The RSI at 54.72 is Neutral, neither overbought nor oversold. The STOCH value of 68.83 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $8.01B | 21.23 | 11.18% | ― | 2.29% | 14.98% | |
69 Neutral | $95.16B | 30.53 | 51.23% | 0.40% | 20.35% | 11.96% | |
65 Neutral | $37.71B | 24.48 | -43.80% | 1.32% | -1.94% | 85.70% | |
65 Neutral | $3.09B | 15.01 | 12.05% | ― | 0.63% | 4.23% | |
59 Neutral | $59.82B | 31.74 | 130.60% | 0.73% | 11.56% | 5.31% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
41 Neutral | $387.77M | ― | -144.11% | ― | -17.10% | -2720.40% |
* Healthcare Sector Average
MCK
McKesson
738.06
256.52
53.27%
COR
Cencora
302.76
85.08
39.08%
CAH
Cardinal Health
154.46
44.28
40.19%
HSIC
Henry Schein
67.03
-2.27
-3.28%
OMI
Owens & Minor
4.76
-8.81
-64.92%
PBH
Prestige Consumer Healthcare
63.96
-3.57
-5.29%
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.