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McKesson Corporation (MCK), with a market capitalization of $79.1 billion, is a major player in healthcare services and pharmaceutical distribution, headquartered in Irving, Texas. Renowned for its expansive distribution network and focus on enhancing patient care, McKesson is integral to the healthcare sector, providing pharmaceuticals, medical supplies, and technology solutions to customers both domestically and globally.
Shares of MCK have outperformed the broader market over the last year. The stock has gained 36.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31%. In 2024, the stock has rallied 34.2%, compared to SPX's 25.2% gains on a YTD basis.
Narrowing the focus, MCK also outpaced the Health Care Select Sector SPDR Fund (XLV). The exchange-traded fund has gained 14% over the past year and 5.7% on a YTD basis.
On November 1, McKesson released its Q2 earnings report, resulting in a 5.1% surge in its shares. The company delivered an adjusted EPS of $6.89, exceeding analysts' expectations, while its revenue of $93.7 billion also outpaced consensus estimates.
For the current fiscal year, ending in March 2025, analysts expect MCK’s EPS to grow 19.5% year over year to $32.78 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on another occasion.
Among the 16 analysts covering MCK stock, the consensus rating is a “Strong Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This consensus is less bullish than a month ago when the stock had 10 “Strong Buys.”
On Nov. 13, Citigroup Inc. (C) analyst Daniel Grosslight reiterated a “Buy” rating on McKesson and increased the price target from $630 to $713.
The mean price target of $657.13 represents a 5.4% premium to MCK’s current price levels. The Street-high price target of $715 suggests an upside potential of 14.7%.
