Stock of the Day

July 15, 2019

McKesson (MCK)

$597.68
-$5.83 (-1.0%)
Market Cap: $75.64B

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. This segment also offers 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 RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.

McKesson Bull Case

Here are some ways that investors could benefit from investing in McKesson Co.:

  • The current stock price of McKesson Co. is $593.82, which is significantly below the average price target of $645.79, indicating potential for price appreciation.
  • McKesson Co. has a consensus rating of "Moderate Buy," suggesting that analysts believe the stock is a good investment opportunity.
  • The company recently announced a quarterly dividend of $0.71 per share, providing a steady income stream for investors, with an annualized yield of 0.48%.
  • Institutional investors own 85.07% of McKesson Co.'s stock, indicating strong confidence from large financial entities in the company's future performance.
  • Despite a recent earnings miss, analysts forecast an EPS of 32.69 for the current year, suggesting growth potential in profitability.

McKesson Bear Case

Investors should be bearish about investing in McKesson Co. for these reasons:

  • Insider selling has been observed, with executives selling 1,346 shares worth $795,275 in the last three months, which may indicate a lack of confidence in the stock's short-term performance.
  • The company reported a negative return on equity of 181.26%, which suggests that it is not effectively generating profit from its equity investments.
  • McKesson Co. has a relatively low net margin of 0.82%, indicating that it retains a small portion of revenue as profit, which could limit growth and investment opportunities.
  • The stock has experienced volatility, with a 1-year low of $464.42 and a high of $637.51, which may deter risk-averse investors.
  • Recent insider transactions show a 15.17% decrease in the position of an executive vice president, which could raise concerns about the company's internal outlook.

Recent News