McKesson Corporation (NYSE:MCK) Receives Average Rating of "Moderate Buy" from Brokerages

Key Points

• Analysts maintain a “Moderate Buy” consensus on McKesson, with 14 buy ratings and four holds among 18 firms. The average 12-month price target is $973.44, with recent targets ranging from $933 to $1,080.
• McKesson exceeded quarterly expectations, reporting $9.93 EPS versus the $9.56 consensus and $105.38 billion in revenue, up 7.7% year over year. The company also raised its quarterly dividend from $0.82 to $0.94 per share.
• Institutional investors own approximately 85.07% of McKesson, while company insiders sold $13.64 million of stock during the latest quarter.

McKesson Corporation (NYSE:MCK - Get Free Report) has earned a consensus rating of "Moderate Buy" from the eighteen research firms that are covering the company, Marketbeat reports. Four research analysts have rated the stock with a hold recommendation and fourteen have assigned a buy recommendation to the company. The average twelve-month target price among brokers that have covered the stock in the last year is $973.4375.

MCK has been the topic of a number of recent research reports. Robert W. Baird set a $1,015.00 price objective on McKesson in a report on Thursday, August 6th. Citigroup increased their target price on McKesson from $945.00 to $1,000.00 and gave the stock a "buy" rating in a report on Friday, July 24th. Wells Fargo & Company boosted their price target on McKesson from $812.00 to $933.00 and gave the company an "equal weight" rating in a research note on Tuesday, August 11th. Wall Street Zen lowered McKesson from a "buy" rating to a "hold" rating in a research note on Saturday, June 27th. Finally, UBS Group upped their price target on McKesson from $1,050.00 to $1,080.00 and gave the company a "buy" rating in a research report on Thursday, August 6th.

Insider Buying and Selling

In related news, Director Bradley Lerman sold 301 shares of McKesson stock in a transaction dated Monday, August 10th. The shares were sold at an average price of $892.33, for a total transaction of $268,591.33. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Brian Tyler sold 8,463 shares of the business's stock in a transaction dated Tuesday, July 7th. The shares were sold at an average price of $793.56, for a total transaction of $6,715,898.28. Following the completion of the transaction, the chief executive officer owned 5,919 shares in the company, valued at approximately $4,697,081.64. This trade represents a 58.84% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 17,338 shares of company stock worth $13,643,366 in the last quarter. 0.06% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently modified their holdings of the business. California State Teachers Retirement System grew its holdings in shares of McKesson by 73,780.3% during the second quarter. California State Teachers Retirement System now owns 141,246,575 shares of the company's stock worth $106,725,912,000 after purchasing an additional 141,055,392 shares during the last quarter. BlackRock Inc. bought a new position in shares of McKesson in the second quarter valued at about $8,156,743,000. Norges Bank bought a new position in shares of McKesson in the fourth quarter valued at about $1,651,137,000. Bank of America Corp DE bought a new position in shares of McKesson in the second quarter valued at about $998,896,000. Finally, Legal & General Group Plc acquired a new position in McKesson during the 2nd quarter worth about $656,566,000. 85.07% of the stock is owned by institutional investors and hedge funds.

McKesson Stock Performance

Shares of MCK stock opened at $880.51 on Friday. The firm has a fifty day moving average of $860.19 and a 200-day moving average of $841.27. The stock has a market cap of $102.66 billion, a price-to-earnings ratio of 23.56, a P/E/G ratio of 1.75 and a beta of 0.30. McKesson has a 52-week low of $687.68 and a 52-week high of $999.00.

McKesson (NYSE:MCK - Get Free Report) last issued its earnings results on Wednesday, August 5th. The company reported $9.93 earnings per share for the quarter, beating the consensus estimate of $9.56 by $0.37. McKesson had a net margin of 1.12% and a negative return on equity of 253.21%. The business had revenue of $105.38 billion for the quarter, compared to analyst estimates of $103.88 billion. During the same period in the previous year, the business earned $8.26 EPS. The firm's revenue was up 7.7% on a year-over-year basis. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. On average, sell-side analysts predict that McKesson will post 44.65 earnings per share for the current year.

McKesson Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, October 1st. Stockholders of record on Tuesday, September 1st will be issued a $0.94 dividend. This represents a $3.76 annualized dividend and a dividend yield of 0.4%. The ex-dividend date of this dividend is Tuesday, September 1st. This is a positive change from McKesson's previous quarterly dividend of $0.82. McKesson's payout ratio is currently 10.06%.

About McKesson

McKesson Corporation is a healthcare services and distribution company that supplies pharmaceuticals, specialty drugs, medical products and related services to pharmacies, hospitals, health systems, physicians and other healthcare providers. Its operations support the movement of prescription medicines and medical-surgical supplies from manufacturers to healthcare organizations and patients.

The company's businesses include pharmaceutical distribution, specialty pharmaceutical services, medical-surgical supply distribution and technology solutions for pharmacies and other healthcare providers.

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