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McKesson
(NYSE:MCK)
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Rating:71Outperform
Price Target:
$1,122.00
▲(23.97% Upside)
Action:Reiterated
Date:10/06/26
The score is driven primarily by strong cash generation and a positive operating outlook with raised FY2027 EPS guidance, supported by constructive price momentum. These positives are tempered by a structurally weak balance sheet (persistent negative equity) and a valuation that looks closer to fair-to-full with a low dividend yield.
Positive Factors
Strong cash generation
McKesson converts earnings into substantial cash, giving the business resilience despite its low-margin distribution model. Strong operating and free cash flow can fund technology, logistics, strategic investments, debt service, and shareholder returns over the next several quarters.
Negative Factors
Negative shareholders’ equity
Persistent negative equity is a structural balance-sheet weakness that reduces financial flexibility and makes conventional leverage signals harder to interpret. Although assets and liquidity are substantial, this capital structure leaves less protection against downturns, restructuring costs, or weaker cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
McKesson converts earnings into substantial cash, giving the business resilience despite its low-margin distribution model. Strong operating and free cash flow can fund technology, logistics, strategic investments, debt service, and shareholder returns over the next several quarters.
Read all positive factors
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:
The Fly
The FlyMcKesson (MCK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$120.10B
Dividend Yield0.33%
Average Volume (3M)813.39K
Price to Earnings (P/E)27.1
Beta (1Y)0.07
Revenue Growth8.84%
EPS Growth48.98%
CountryUS
Employees42,300
SectorHealthcare
Sector Strength45
IndustryMedical - Distribution
Share Statistics
EPS (TTM)37.53
Shares Outstanding116,590,360
10 Day Avg. Volume704,923
30 Day Avg. Volume813,387
Financial Highlights & Ratios
PEG Ratio0.46
Price to Book (P/B)-49.24
Price to Sales (P/S)0.27
P/FCF Ratio19.77
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue0.24
Enterprise Value/Gross Profit6.65
Enterprise Value/Ebitda13.55
Forecast
1Y Price Target
$1,005.07Price Target Upside11.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
EPS Forecast (FY)44.64
Revenue Forecast (FY)$431.92B
McKesson Business Overview & Revenue Model
Company Description
McKesson Corporation is a prominent global provider of healthcare services, operating extensively in both the United States and international markets. Its diverse operations are strategically organized into four key business segments. The U.S. Pha...
How the Company Makes Money
McKesson makes money primarily by distributing pharmaceuticals and healthcare products and charging customers for the value it provides in procurement, inventory management, logistics, and related services.
1) Pharmaceutical distribution (core re...
McKesson Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call communicated strong operational momentum: double-digit EPS growth, an 8% revenue increase to $105.4B, broad-based segment strength (notably Oncology & Multispecialty and North American Pharmaceuticals), improved gross profit and operating leverage, a raised full-year EPS guide, active capital returns (large buyback and dividend increase), and continued strategic progress on the MedSurg separation and tech/AI initiatives. Lowlights included a quarterly negative free cash flow readout (seasonal but improved vs prior year), a 20% decline in MedSurg operating profit, financing-related interest expense and GAAP remeasurement charges, and macro/regulatory uncertainties (WAC reductions, branded-to-generic conversions, 340B/IRA policy risks). Overall, the positive operational and financial beats and raised guidance materially outweigh the noted one-offs, financing costs, and policy risks.Positive Updates
Top-Line and EPS Outperformance
Revenues increased 8% year-over-year to $105.4 billion and adjusted EPS rose 20% to $9.93, both results exceeded expectations. Management raised full-year adjusted EPS guidance to $44.20–$45.00 (implying ~13–15% adjusted EPS growth).
Negative Updates
Medical Surgical Solutions Operating Profit Decline
MedSurg operating profit decreased 20% year-over-year to $195 million, driven by product mix and a one-time administrative expense despite a 4% revenue increase to $2.8 billion.
Read all updates
Q1-2027 Updates
Positive
Negative
Top-Line and EPS Outperformance
Revenues increased 8% year-over-year to $105.4 billion and adjusted EPS rose 20% to $9.93, both results exceeded expectations. Management raised full-year adjusted EPS guidance to $44.20–$45.00 (implying ~13–15% adjusted EPS growth).
Read all positive updates
Company Guidance
McKesson raised its fiscal 2027 adjusted EPS guidance to $44.20–$45.00 (from $43.80–$44.60) — implying roughly 13%–15% adjusted EPS growth (or 15%–17% on an alternate FY26 basis) — and now expects revenue growth of 5%–9% and operating profit growth of 9%–13% for the year. Segment guidance: North American Pharmaceuticals revenue +4%–8% (operating profit toward the high end of the prior 5.5%–9.5% range), Oncology & Multispecialty revenue +14.5%–18.5% (op profit +13.5%–17.5%), Prescription Technology Solutions revenue +2.5%–6.5% (op profit +11%–15%), and MedSurg revenue +1%–6% (op profit flat to +4%). Below‑the‑line and cash items include corporate expenses of $580–$640M, interest expense $380–$420M, income attributable to noncontrolling interest $295–$325M, an effective tax rate of 18%–19%, expected free cash flow of ~$4.5–$4.9B, ~ $5B of planned share repurchases ( ~$2.5B completed in Q1), and estimated diluted shares of 115.5–117.5M.McKesson Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
38
Negative
Cash Flow
81
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 410.98B | 403.43B | 359.05B | 308.95B | 276.71B | 263.97B |
| Gross Profit | 14.96B | 14.55B | 12.48B | 12.20B | 11.87B | 12.65B |
| EBITDA | 7.34B | 7.18B | 5.25B | 4.67B | 5.49B | 2.87B |
| Net Income | 4.59B | 4.76B | 3.29B | 3.00B | 3.56B | 1.11B |
Balance Sheet | ||||||
| Total Assets | 88.33B | 82.32B | 75.14B | 67.44B | 62.32B | 63.30B |
| Cash, Cash Equivalents and Short-Term Investments | 5.16B | 3.98B | 5.69B | 4.58B | 4.68B | 3.53B |
| Total Debt | 11.70B | 8.61B | 7.39B | 7.39B | 7.29B | 7.54B |
| Total Liabilities | 92.19B | 83.16B | 76.83B | 69.04B | 63.81B | 65.09B |
| Stockholders Equity | -4.24B | -2.17B | -2.07B | -1.97B | -1.86B | -2.27B |
Cash Flow | ||||||
| Free Cash Flow | 6.18B | 5.41B | 5.23B | 3.63B | 4.60B | 3.90B |
| Operating Cash Flow | 6.85B | 6.16B | 6.08B | 4.31B | 5.16B | 4.43B |
| Investing Cash Flow | -82.00M | -3.43B | -733.00M | -1.07B | -542.00M | -89.00M |
| Financing Cash Flow | -4.17B | -4.63B | -3.96B | -3.34B | -4.37B | -6.32B |
McKesson Technical Analysis
Positive
905.09
Price Trends
906.96
Positive
857.12
Positive
856.51
Positive
Market Momentum
35.43
Negative
71.32
Negative
88.89
Negative
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 905.09 is below the 20-day moving average (MA) of 941.26, below the 50-day MA of 906.96, and above the 200-day MA of 856.51, indicating a bullish trend. The MACD of 35.43 indicates Negative momentum. The RSI at 71.32 is Negative, neither overbought nor oversold. The STOCH value of 88.89 is Negative, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.34B | 13.35 | 9.22% | 1.25% | -1.36% | -16.45% | |
74 Outperform | $2.47B | 37.12 | 30.80% | ― | 10.31% | ― | |
71 Outperform | $120.10B | 27.06 | -194.39% | 0.33% | 8.84% | 48.98% | |
71 Outperform | $65.51B | 25.18 | 106.43% | 0.70% | 5.09% | 38.10% | |
62 Neutral | $59.64B | 35.41 | -59.73% | 0.80% | 14.23% | 12.28% | |
61 Neutral | $9.47B | 24.57 | 12.37% | ― | 6.49% | 10.41% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
MCK
McKesson
1,012.34
222.48
28.17%
COR
Cencora
338.48
12.41
3.80%
CAH
Cardinal Health
255.64
97.97
62.14%
HSIC
Henry Schein
86.00
22.41
35.24%
PBH
Prestige Consumer Healthcare
49.46
-13.13
-20.98%
GRDN
Guardian Pharmacy Services, Inc. Class A
39.59
11.56
41.24%
McKesson Corporate Events
Business Operations and StrategyDelistings and Listing ChangesFinancial DisclosuresM&A Transactions
McKesson, CD&R to Acquire Option Care Health
Positive
Oct 6, 2026
On October 6, 2026, Clayton, Dubilier Rice and McKesson agreed to acquire Option Care Health, the largest independent U.S. provider of home and alternate site infusion services, for $32.05 per share in a deal valuing the company at about $5.8 bil...
Business Operations and StrategyRegulatory Filings and Compliance
McKesson Reports Recent Cybersecurity Incident Under Regulation FD
Negative
Aug 28, 2026
McKesson Corporation reported that on August 25, 2026, it discovered a cybersecurity incident affecting its information systems, and an investigation into the breach remains in its early stages. As of the date of the filing, the company has not co...
Executive/Board ChangesShareholder Meetings
McKesson Shareholders Back Board, Auditors, and Executive Pay
Positive
Jul 24, 2026
On July 22, 2026, McKesson Corporation held its Annual Meeting of Shareholders, at which all board-nominated directors were elected, including CEO Brian S. Tyler, despite receiving the highest level of opposition among nominees. The voting outcome...
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.