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1. Company Snapshot

1.a. Company Description

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


This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies.The International segment offers distribution and services to wholesale, institutional, and retail customers in 13 European countries and Canada.The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers.


The RxTS segment serves biopharma and life sciences partners and patients to address medication challenges for patients throughout their journeys; connects pharmacies, providers, payers, and biopharma companies to deliver innovative access and adherence solutions; and provides third-party logistics and wholesale distribution support solutions.McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.

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1.b. Last Insights on MCK

McKesson Corporation's recent performance was driven by strong revenue growth, margin expansion, and raised EPS guidance. The company's Q3 revenue increased 11% to $106.2 billion, with adjusted EPS guidance raised to $38.80-$39.20, reflecting 17-19% year-over-year growth. Its Oncology & Multispecialty segment growth and strategic divestitures of low-margin Medical-Surgical Solutions have contributed to margin expansion. Additionally, the company's recent earnings beat, with EPS of $9.34, exceeded estimates, positioning it for continued growth. (Source: McKesson Corp Q3 2026 Earnings Call Highlights)

1.c. Company Highlights

2. McKesson Corporation's Strong Q3 FY2026 Earnings Beat Estimates

McKesson Corporation reported revenue of $106.2 billion, an 11% increase, and earnings per diluted share of $9.34, a 16% increase, beating analyst estimates of $9.17. The company's gross profit was $3.7 billion, a 10% increase, and operating profit was $1.7 billion, a 13% increase. The strong performance was driven by double-digit revenue growth in oncology, biopharma services, and North American distribution.

Publication Date: Feb -05

📋 Highlights
  • Revenue and EPS Growth:: McKesson reported $106.2 billion in revenue (11% increase) and $9.34 earnings per diluted share (16% increase), driven by oncology, biopharma, and distribution segments.
  • Oncology & Multispecialty Performance:: Segment revenue surged 37% to $X billion, with operating profit up 57%, fueled by Prism Vision and Core Ventures acquisitions.
  • 2026 Earnings Guidance Raised:: Adjusted EPS guidance set at $38.80–$39.20 (17–19% growth), with revenue growth projected at 12–16% and operating profit growth at 13–17%.
  • North American Pharma Momentum:: Segment revenue increased 9%, with 6% operating profit growth, supported by specialty distribution and inventory efficiency gains.
  • Balance Sheet Strength:: $3 billion in cash and $4.4–4.8 billion in free cash flow, supporting $2 billion in share repurchases and $101 million in dividends.

Segment Performance

The North American Pharmaceutical segment saw revenue increase by 9% and operating profit increase by 6%. The Oncology and Multispecialty segment reported revenue growth of 37% and operating profit growth of 57%, driven by strong underlying performance and the company's connectivity and workflow integration. The Prescription Technology Solutions segment saw strong operating profit results, driven by the addition of 50 new programs across 43 unique brands and improved efficiency.

Outlook and Guidance

McKesson Corporation raised and narrowed its fiscal 2026 earnings per diluted share guidance range to $38.80 to $39.20, representing 17 to 19% growth over the prior year. The company expects revenue growth of 12 to 16% and operating profit growth of 13% to 17%. The oncology and multispecialty segment is expected to grow 29-33% in revenue and 51-55% in operating profit.

Valuation and Metrics

With a P/E Ratio of 25.27 and an EV/EBITDA of 18.35, McKesson Corporation's valuation appears reasonable given its strong growth prospects. The company's ROIC of 21.67% indicates efficient use of capital. Analysts estimate next year's revenue growth at 8.4%, which is slightly lower than the current year's growth rate. The company's dividend yield of 0.37% and free cash flow yield of 6.25% provide a reasonable return to shareholders.

Regulatory Environment

McKesson Corporation is navigating the evolving policy landscape, including the impact of IRA and NFP, and is focused on influencing factors outside of its direct negotiation. The company believes its distributor value proposition is strong and is well-positioned to adapt to the changing regulatory environment.

3. NewsRoom

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See How Institutional Inflows Make McKesson Fly

Feb -25

Source: fxempire.com

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McKesson Corporation: Strong Q3 Earnings But Upside Exhausted

Feb -24

Source: seekingalpha.com

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Counterpoint Mutual Funds LLC Buys 898 Shares of McKesson Corporation $MCK

Feb -24

Source: defenseworld.net

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McKesson Corporation $MCK Shares Purchased by Dana Investment Advisors Inc.

Feb -24

Source: defenseworld.net

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Chase Investment Counsel Corp Trims Stake in McKesson Corporation $MCK

Feb -24

Source: defenseworld.net

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Empirical Financial Services LLC d.b.a. Empirical Wealth Management Buys 1,585 Shares of McKesson Corporation $MCK

Feb -21

Source: defenseworld.net

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Illinois Municipal Retirement Fund Decreases Stake in McKesson Corporation $MCK

Feb -14

Source: defenseworld.net

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Candriam S.C.A. Buys 39,586 Shares of McKesson Corporation $MCK

Feb -09

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.70%)

6. Segments

U.S. Pharmaceutical

Expected Growth: 9.5%

The U.S. pharmaceutical segment is expected to grow at a rate slightly below the global average due to intense competition and potential pricing pressures. However, the ongoing demand for pharmaceuticals, including generics, will support its growth.

International

Expected Growth: 11.2%

The international segment is poised for slightly higher growth than the global average, driven by emerging market opportunities, diverse healthcare needs, and the potential for strategic expansions.

Medical-Surgical Solutions

Expected Growth: 7.5%

The growth in this segment is anticipated to be lower than the global average, as it is subject to fluctuations in healthcare utilization and potential consolidation among healthcare providers, which could impact procurement strategies.

Prescription Technology Solutions

Expected Growth: 14.2%

This segment is expected to grow significantly above the global average, driven by the increasing demand for digital healthcare solutions, the need for streamlined prescription processes, and the potential for innovation in patient care technologies.

7. Detailed Products

Pharmaceutical Distribution

McKesson's pharmaceutical distribution business provides prescription and over-the-counter medications, as well as vaccines and biopharmaceuticals, to pharmacies, hospitals, and clinics.

Medical-Surgical Distribution

McKesson's medical-surgical distribution business provides medical supplies, equipment, and services to healthcare providers, including hospitals, surgery centers, and physician offices.

Technology and Analytics

McKesson's technology and analytics business provides healthcare technology solutions, including electronic health records, revenue cycle management, and analytics, to healthcare providers.

Oncology and Specialty Care

McKesson's oncology and specialty care business provides specialty pharmaceuticals, medical supplies, and services to oncologists, hematologists, and other specialty physicians.

Retail Pharmacy Solutions

McKesson's retail pharmacy solutions business provides technology, services, and support to independent pharmacies, helping them to operate efficiently and effectively.

8. McKesson Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

McKesson Corporation operates in the healthcare industry, where there are limited substitutes for its pharmaceutical distribution and medical-surgical distribution services. However, the company faces some threat from online pharmacies and other alternative distribution channels.

Bargaining Power Of Customers

McKesson Corporation's customers, including hospitals, clinics, and pharmacies, have limited bargaining power due to the company's strong market position and diversified customer base.

Bargaining Power Of Suppliers

McKesson Corporation's suppliers, including pharmaceutical manufacturers, have some bargaining power due to the company's dependence on them for products. However, the company's large scale and diversified supplier base mitigate this risk.

Threat Of New Entrants

The threat of new entrants in the pharmaceutical distribution and medical-surgical distribution industries is low due to the high barriers to entry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The pharmaceutical distribution and medical-surgical distribution industries are highly competitive, with several large players competing for market share. McKesson Corporation faces intense rivalry from companies such as AmerisourceBergen and Cardinal Health.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 152.01%
Debt Cost 4.09%
Equity Weight -52.01%
Equity Cost 6.19%
WACC 2.99%
Leverage -292.29%

11. Quality Control: McKesson Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
J&J

A-Score: 6.9/10

Value: 3.1

Growth: 4.0

Quality: 8.8

Yield: 6.0

Momentum: 9.5

Volatility: 10.0

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AbbVie

A-Score: 6.7/10

Value: 3.1

Growth: 4.7

Quality: 7.2

Yield: 7.0

Momentum: 9.5

Volatility: 9.0

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Stock-Card
Cardinal Health

A-Score: 6.6/10

Value: 6.8

Growth: 6.6

Quality: 4.5

Yield: 4.0

Momentum: 10.0

Volatility: 8.0

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Stock-Card
McKesson

A-Score: 6.1/10

Value: 5.4

Growth: 8.3

Quality: 4.5

Yield: 0.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Cencor

A-Score: 5.9/10

Value: 3.4

Growth: 6.7

Quality: 4.3

Yield: 2.0

Momentum: 9.5

Volatility: 9.7

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Stock-Card
Regeneron Pharmaceuticals

A-Score: 4.9/10

Value: 4.0

Growth: 6.4

Quality: 8.8

Yield: 0.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

995.69$

Current Price

995.69$

Potential

-0.00%

Expected Cash-Flows