McKesson Corporation (NYSE:MCK) Stock Has Consensus Target Price of $973.19 According to Brokerages

Key Points

• Analysts remain broadly positive: Eighteen brokerages give McKesson a consensus “Moderate Buy” rating, with 14 buys and four holds. The average 12-month price target is $973.19.
• Recent results exceeded expectations: McKesson reported quarterly EPS of $9.93 versus the $9.56 consensus and revenue of $105.38 billion, up 7.7% year over year. The company also raised its quarterly dividend from $0.82 to $0.94 per share.
• Expansion supports the outlook but adds execution risk: McKesson agreed to invest about $1.4 billion for a 49% stake in Option Care Health and extended its CVS agreement through 2032. Investors may weigh the strategic benefits against acquisition financing, regulatory approval and integration risks.

McKesson Corporation (NYSE:MCK - Get Free Report) has received a consensus recommendation of "Moderate Buy" from the eighteen brokerages that are presently covering the stock, MarketBeat reports. Four equities research analysts have rated the stock with a hold rating and fourteen have issued a buy rating on the company. The average 12-month price objective among analysts that have updated their coverage on the stock in the last year is $973.19.

A number of research firms recently issued reports on MCK. Barclays lifted their target price on McKesson from $925.00 to $1,000.00 and gave the company an "overweight" rating in a research report on Wednesday, August 19th. Wells Fargo & Company raised 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. Weiss Ratings upgraded McKesson from a "buy (b-)" rating to a "buy (b)" rating in a research note on Friday, September 4th. Robert W. Baird set a $1,015.00 price objective on McKesson in a report on Thursday, August 6th. Finally, Wall Street Zen cut shares of McKesson from a "buy" rating to a "hold" rating in a research note on Saturday, June 27th.

McKesson Trading Down 1.4%

Shares of MCK opened at $908.99 on Thursday. The stock has a market capitalization of $105.98 billion, a price-to-earnings ratio of 24.32, a PEG ratio of 1.83 and a beta of 0.30. McKesson has a 12 month low of $723.68 and a 12 month high of $999.00. The firm has a fifty day simple moving average of $882.32 and a 200 day simple moving average of $832.73.

McKesson (NYSE:MCK - Get Free Report) last issued its quarterly earnings results on Wednesday, August 5th. The company reported $9.93 earnings per share (EPS) 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 firm 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 company's revenue was up 7.7% compared to the same quarter last year. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. As a group, research analysts predict that McKesson will post 44.73 earnings per share for the current fiscal year.

McKesson Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st were paid a $0.94 dividend. This is an increase from McKesson's previous quarterly dividend of $0.82. This represents a $3.76 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date was Tuesday, September 1st. McKesson's dividend payout ratio is 10.06%.

Key Headlines Impacting McKesson

Here are the key news stories impacting McKesson this week:

• Positive Sentiment: Expansion into home infusion: McKesson and Clayton, Dubilier & Rice agreed to acquire Option Care Health for approximately $5.8 billion, or $32.05 per share—a 37% premium to Option Care’s unaffected price. CD&R will own about 51%, while McKesson will invest approximately $1.4 billion for a 49% stake. The deal gives McKesson exposure to the growing home- and alternate-site infusion market. CD&R and McKesson Corporation Sign Agreement to Acquire Option Care Health
• Positive Sentiment: CVS agreement extended: McKesson extended its pact with CVS Health through 2032, supporting the durability of its prescription-drug distribution business and improving visibility into future revenue. McKesson extends CVS deal as Argus raises McKesson stock target
• Positive Sentiment: Analyst optimism: Leerink Partners raised its McKesson price target from $1,030 to $1,070 and maintained an “outperform” rating, citing additional upside. Recent earnings also showed better-than-expected adjusted earnings and revenue growth. Leerink Partners Adjusts Price Target on McKesson
• Neutral Sentiment: Strategic rationale versus execution risk: Option Care could benefit from the shift of complex infusion treatments toward home and outpatient settings, but the acquisition remains subject to shareholder and regulatory approvals and will require meaningful capital from McKesson.
• Negative Sentiment: Market and valuation pressure: McKesson underperformed the broader market during the session. Investors may also be cautious about the company’s narrow net margin, negative book equity and the possibility that acquisition financing, integration costs or regulatory delays could limit near-term benefits. Here’s Why McKesson Fell More Than the Broader Market

Insiders Place Their Bets

In other news, CAO Napoleon B. Rutledge, Jr. sold 111 shares of the company's stock in a transaction dated Tuesday, September 8th. The shares were sold at an average price of $891.45, for a total value of $98,950.95. Following the sale, the chief accounting officer directly owned 521 shares of the company's stock, valued at approximately $464,445.45. This represents a 17.56% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bradley E. Lerman sold 301 shares of the firm's 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. Additional details regarding this sale are available in the official SEC disclosure. Company insiders own 0.06% of the company's stock.

Institutional Trading of McKesson

A number of hedge funds have recently made changes to their positions in the business. Elm3 Financial Group LLC lifted its holdings in McKesson by 18.4% during the 3rd quarter. Elm3 Financial Group LLC now owns 374 shares of the company's stock valued at $319,000 after purchasing an additional 58 shares during the last quarter. Moody National Bank Trust Division raised its position in shares of McKesson by 4.9% in the third quarter. Moody National Bank Trust Division now owns 1,433 shares of the company's stock valued at $1,224,000 after purchasing an additional 67 shares during the period. Rosenberg Matthew Hamilton lifted its stake in shares of McKesson by 2.8% during the 3rd quarter. Rosenberg Matthew Hamilton now owns 406 shares of the company's stock worth $347,000 after buying an additional 11 shares during the last quarter. Baker Tilly Wealth Management LLC lifted its stake in shares of McKesson by 11.3% during the 3rd quarter. Baker Tilly Wealth Management LLC now owns 394 shares of the company's stock worth $337,000 after buying an additional 40 shares during the last quarter. Finally, Ferguson Wellman Capital Management Inc. boosted its holdings in shares of McKesson by 1.6% during the 3rd quarter. Ferguson Wellman Capital Management Inc. now owns 28,674 shares of the company's stock worth $24,482,000 after buying an additional 438 shares during the period. 85.07% of the stock is owned by institutional investors and hedge funds.

About McKesson

McKesson Corporation NYSE: MCK is a healthcare services and information technology company that distributes pharmaceuticals, specialty drugs, medical supplies and other healthcare products. The company serves pharmacies, hospitals, health systems, physician practices, biopharma manufacturers and other healthcare providers, helping move products from manufacturers to patients and care settings.

McKesson's principal operations include pharmaceutical distribution, medical-surgical supply distribution and technology-enabled services for pharmacies and providers.

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