McKesson (NYSE:MCK) Sets New 12-Month High - Should You Buy?

Key Points

• McKesson Corporation shares reached a new 12-month high of $776.39, with strong daily trading volume of 105,419 shares.
• Multiple analysts have recently increased their price targets for McKesson, with Citigroup raising it to $860.00, suggesting a bullish outlook for the stock.
• The company announced a quarterly dividend increase to $0.82, up from the previous $0.71, reflecting its continued commitment to returning value to shareholders.

Shares of McKesson Corporation (NYSE:MCK - Get Free Report) reached a new 52-week high during mid-day trading on Tuesday . The company traded as high as $776.39 and last traded at $776.26, with a volume of 105419 shares traded. The stock had previously closed at $769.49.

Analysts Set New Price Targets

A number of research analysts recently weighed in on the company. Citigroup upped their price target on McKesson from $820.00 to $860.00 and gave the stock a "buy" rating in a research note on Wednesday, September 24th. TD Cowen boosted their price objective on McKesson from $830.00 to $864.00 and gave the company a "buy" rating in a report on Wednesday, September 24th. Weiss Ratings restated a "buy (b)" rating on shares of McKesson in a report on Wednesday, October 8th. Evercore ISI boosted their price objective on McKesson from $800.00 to $825.00 and gave the company an "outperform" rating in a report on Wednesday, September 24th. Finally, Morgan Stanley boosted their price objective on McKesson from $810.00 to $857.00 and gave the company an "overweight" rating in a report on Wednesday, September 24th. One equities research analyst has rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $834.54.

McKesson Stock Up 1.3%

The company has a market cap of $96.95 billion, a PE ratio of 31.07, a PEG ratio of 1.38 and a beta of 0.52. The company has a 50-day moving average of $708.64 and a 200-day moving average of $707.37.

McKesson (NYSE:MCK - Get Free Report) last announced its earnings results on Wednesday, August 6th. The company reported $8.26 earnings per share (EPS) for the quarter, missing the consensus estimate of $8.33 by ($0.07). The company had revenue of $97.83 billion for the quarter, compared to analysts' expectations of $95.93 billion. McKesson had a net margin of 0.84% and a negative return on equity of 196.66%. The firm's quarterly revenue was up 23.4% on a year-over-year basis. During the same period in the previous year, the firm earned $7.88 EPS. As a group, equities analysts predict that McKesson Corporation will post 32.77 EPS for the current year.

McKesson Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, October 1st. Shareholders of record on Tuesday, September 2nd were given a $0.82 dividend. This is an increase from McKesson's previous quarterly dividend of $0.71. This represents a $3.28 annualized dividend and a yield of 0.4%. The ex-dividend date of this dividend was Tuesday, September 2nd. McKesson's payout ratio is presently 13.08%.

Insider Buying and Selling at McKesson

In other McKesson news, CEO Brian S. Tyler sold 11,930 shares of the business's stock in a transaction on Friday, August 22nd. The stock was sold at an average price of $705.63, for a total value of $8,418,165.90. Following the transaction, the chief executive officer owned 4,012 shares of the company's stock, valued at approximately $2,830,987.56. The trade was a 74.83% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CAO Napoleon B. Rutledge, Jr. sold 329 shares of the business's stock in a transaction on Friday, August 8th. The stock was sold at an average price of $663.67, for a total value of $218,347.43. Following the completion of the transaction, the chief accounting officer directly owned 657 shares in the company, valued at approximately $436,031.19. This represents a 33.37% decrease in their position. The disclosure for this sale can be found here. In the last three months, insiders sold 24,189 shares of company stock worth $16,722,190. Insiders own 0.08% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in MCK. Norges Bank purchased a new position in shares of McKesson during the 2nd quarter valued at $1,346,661,000. Alliancebernstein L.P. lifted its holdings in McKesson by 150.4% during the 2nd quarter. Alliancebernstein L.P. now owns 2,268,015 shares of the company's stock worth $1,661,956,000 after purchasing an additional 1,362,386 shares in the last quarter. Nuveen LLC purchased a new stake in McKesson during the 1st quarter worth about $475,235,000. Arrowstreet Capital Limited Partnership lifted its holdings in McKesson by 56.4% during the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 1,236,536 shares of the company's stock worth $906,109,000 after purchasing an additional 446,060 shares in the last quarter. Finally, Wellington Management Group LLP lifted its holdings in McKesson by 4,559.6% during the 1st quarter. Wellington Management Group LLP now owns 427,703 shares of the company's stock worth $287,840,000 after purchasing an additional 418,524 shares in the last quarter. Hedge funds and other institutional investors own 85.07% of the company's stock.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products.

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