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McKesson Corporation (MCK), headquartered in Irving, Texas, provides healthcare services to advance patients' health outcomes. Valued at $76.69 billion by market cap, the company distributes branded and generic pharmaceutical drugs and other healthcare-related products and provides practice management, technology, clinical support, and business solutions. It offers enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions.
Companies worth $10 billion or more are generally described as “large-cap stocks,” MCK fits right into that category, signifying its substantial size, stability, and dominance in its industry. The company partners with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to make quality healthcare accessible and affordable.
The healthcare services major has fallen marginally from its 52-week high of $592.41, which it hit on Jun. 13. Shares of MCK are up 10.9% over the past three months, outperforming the broader S&P 500 Healthcare Sector SPDR (XLV) marginal gains over the same time frame.
In the long term, MCK shares have risen 45.7% over the past year, and in 2024, the stock is up 27.8%. By contrast, the XLV is up 6.7% on a YTD basis and 10.1% over the past 52 weeks.
To confirm the bullish price trend, MCK has been trading above its 50-day moving average since early May and above its 200-day moving average since early May 2023.
MCK’s overall performance can be attributed to its optimistic guidance for fiscal 2025, given its strong operating momentum, solid financial position, and balanced approach to capital deployment. It expects EPS between $31.25 and $32.05, indicating a 14% to 17% improvement compared to the prior year. In its Q4 results, revenue and adjusted EPS fell short of analysts’ estimates.
Its adjusted EPS came in at $6.18, below the consensus estimate of $6.34, and its revenue of $76.36 billion fell short of the Wall Street estimates of $78.72 billion. For the full year, MCK reported revenue and net profit of $308.95 billion and $3 billion, or $22.39 per share, respectively.
Rival Cardinal Health, Inc. (CAH) has underperformed MCK. CAH stock has gained 9.3% in the past 52 weeks but declined 1.1% on a YTD basis.
With its recent outperformance compared to other healthcare stocks, analysts remain optimistic about MCK’s prospects. The stock has a consensus rating of “Strong Buy” from the 16 analysts covering it, and the mean price target of $605.50 is only a 2.6% premium to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
