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Valued at a market cap of $76.6 billion, Irving, Texas-based McKesson Corporation (MCK) is a leading healthcare services and information technology company. It operates globally through four primary segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International.
Companies worth more than $10 billion are generally described as “large-cap” stocks, and McKesson fits this criterion perfectly. McKesson serves healthcare providers, pharmacies, pharmaceutical manufacturers, and patients, aiming to improve healthcare outcomes through innovative solutions and logistics support.
Despite a 5.3% pullback from its 52-week high of $637.51 reached on Aug. 2, shares of this prescription drug distributor have gained 16.6% over the past three months, underperforming the broader Nasdaq Composite’s ($NASX) 17.6% return over the same time frame.
In the longer term, MCK stock is up 28.3% on a YTD basis, lagging behind NASX’s 32.3% gains. Moreover, shares of MCK have gained 29.7% over the past 52 weeks, compared to NASX’s 37.9% returns over the same time frame.
Yet, MCK has been trading above its 50-day moving average since mid-October and also stayed above its 200-day moving average since early-November, indicating a bullish trend.
Shares of McKesson surged 10.6% following its Q2 earnings release on Nov. 6 due to strong financial results that exceeded analysts' expectations. The company reported adjusted EPS of $7.07 and revenue of $93.7 billion. The upbeat performance was driven by growth in the U.S. Pharmaceutical segment, particularly specialty products and GLP-1 medications, and contributions from Prescription Technology Solutions and Medical-Surgical Solutions. Additionally, McKesson raised its fiscal 2025 adjusted EPS guidance to $32.40 - $33, further boosting investor confidence.
MCK has outperformed its rival Cencora, Inc. (COR), which gained 20% over the past 52 weeks and 17.9% on a YTD basis.
Despite MCK’s underperformance relative to the Nasdaq over the past year, analysts remain bullish about its prospects. The stock has a consensus rating of “Strong Buy” from 16 analysts in coverage, and the mean price target of $662.47 suggests a premium of 11.1% to its current levels.
