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Irving, Texas-based McKesson Corporation (MCK) provides healthcare services in the U.S. and internationally. With a market cap of $65.7 billion, McKesson operates through the U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International segments. It is expected to announce its Q1 earnings for 2025 after the market closes on Wednesday, Nov. 6.
Ahead of the event analysts expect McKesson to report a profit of $6.99 per share, up 12.2% from $6.23 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS earnings thrice over the past four quarters while missing on another occasion. Its adjusted EPS for the last reported quarter grew 8.4% year-over-year to $7.88, while surpassing the consensus estimates by 10.1%.
For fiscal 2025, analysts expect McKesson to report an adjusted EPS of $31.98, up 16.6% from $27.44 in fiscal 2024. In fiscal 2026, its adjusted EPS is expected to grow 10.1% year-over-year to $35.22.
MCK stock has gained 9.2% on a YTD basis, underperforming the S&P 500 Index’s ($SPX) 22.7% gains and the Health Care Select Sector SPDR Fund’s (XLV) 10.8% returns during the same time frame.
Despite reporting better-than-expected earnings, shares of McKesson plummeted 11.3% in the trading session after the release of its Q1 earnings on Aug. 7. Although the company reported a 6.4% year-over-year growth in revenues to $79.3 billion, it missed Wall Street’s topline expectations by a huge margin leading to the sell-off. Additionally, its already low net margin contracted by 13 basis points to 115 basis points compared to the year-ago quarter. This resulted in a 4.5% drop in net income to shareholders to $915 million.
However, the U.S. Pharmaceutical segment, its largest revenue and earnings contributor, reported a 5.7% growth in adjusted operating profit, totaling $815 million, driven by growth in the distribution of specialty products to providers and health systems. It also raised its adjusted EPS guidance to $31.75 to $32.55, from the previous range of $31.25 to $32.05.
The consensus opinion on MCK stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 16 analysts covering the stock, 10 recommend a “Strong Buy,” one advises a “Moderate Buy,” and five suggest a “Hold” rating. The mean price target of $560.47 suggests a potential upside of 10.9% from current price levels.
On the date of publication, Aditya Sarawgi 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.
