MCK
McKesson Corporation$931.35
Unclear
Target $929.93
Report: Mar 07, 2026Healthcare • Medical - Distribution • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$931.35-0.2%
Rec: UnclearConviction: High
Entry Target
$715.33
(23% below current)
Fair Value
$929.93
(0% below current)
Stop Loss
$633.53
(32% below current)
Position Size
Half
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$999.00
52 Week Low$637.00
Avg. 3 Month Volume748K
Efficiency
LTM Gross Margin3.6%
LTM EBITDA Margin1.6%
LTM EBIT Margin1.4%
LTM Operating Margin1.4%
LTM ROA5.3%
LTM ROE-245.3%
LTM ROIC88.9%
LTM ROCE37.3%
Capital Structure
Market Cap (MM)$106.0B
Enterprise Value (MM)$111.7B
Shares Outstanding123.20M
Total Debt (MM)$8.62B
Cash & Equivalents (MM)$2.96B
LTM Net Debt (MM)$5.67B
LTM Net Debt/EBITDA0.9x
Growth
TTM Rev. Growth15.5%
Last 3-Yr Rev. CAGR13.3%
Last 3-Yr EBITDA CAGR7.8%
Last 3-Yr EPS CAGR16.6%
Valuation
Street Target Price$982.38
LTM EV/Revenue0.3x
LTM EV/Gross Profit7.9x
LTM EV/EBIT19.9x
LTM EV/EBITDA17.1x
LTM P/E24.4x
LTM EV/FCF11.6x
LTM P/FCF11.0x
LTM P/TB1.5x
LTM P/B-81.7x
Dividend Yield0.4%
Payout Ratio8.8%
Executive SummarySituation: Current price is $931.35 versus fair value $929.93 (-0.2% expected return), and valuation confidence is stable. Debate: Bull case depends on FY2026 Q4 EPS at upper guidance $39.20 validates oncology/GLP-1 momentum and automation leverage (138bps op ex savings), addressing margin fears and shifting sentiment to compounding premium. Bear case centers on Regulatory erosion (IRA pricing, 340B/MFN disputes) compresses 3.6% gross margins via forced discounts, impairing pricing power and ROIC from 88.9%. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
1. Widening moat via oncology scale (3,300 providers) and RxTS tech drives 12-15% revenue CAGR with 88.9% ROIC >> peers. 2. Capital return machine: $14.9B buybacks at 27.4% yield, $0.62/share dividend (+15%). 3. Defensive oligopoly (33% share) with Golden Age cap cycle (0.2% capex/revenue).
Bear Case
1. Razor-thin 3.6% gross margins vulnerable to IRA pricing reforms and generics deflation. 2. Negative tangible book -$13.6B and incremental ROIC -123% signal reinvestment destruction. 3. Insider sales $65M (0 purchases) amid 40% revenue/0% EPS guidance hit rate.
Key Catalysts
Mid-Term (6-18 months)Impact: High
FY2026 Q4 EPS at upper guidance $39.20 validates oncology/GLP-1 momentum and automation leverage (138bps op ex savings), addressing margin f...
Long-Term (18+ months)Impact: Moderate
Oncology network expansion post-Core Ventures/PRISM to 3,500+ providers reinforces moat, countering peer competition via scale in highest-qu...
Long-Term (18+ months)Impact: Moderate
Recent Q3 guidance raise to 17-19% EPS growth and Norway divestiture completion highlight execution amid stable short interest 1.5%.
Primary Risks
Concern: Medium
Regulatory erosion (IRA pricing, 340B/MFN disputes) compresses 3.6% gross margins via forced discounts, impairing pricing power and ROIC fro...
Concern: Low
Technological disruption from PBM vertical integration or low-cost entrants erodes distribution moat, hitting 4.9x asset turnover.
Concern: Medium
Stewardship is strong: elite board (ex-J&J CFO Audit Chair, ex-McD CFO Finance Chair) oversees 27.4% buyback yield and ROIC-tied PSUs (25% w...
Recent Activity
2026-02-05SEC Filing (8-K)
+16.52%McKesson reports Q3 FY2026 results with 11% revenue growth and raises full-year adjusted EPS guidance to $38.80-$39.20.
2025-09-23SEC Filing (8-K)
+6.36%McKesson held 2025 Investor Day, unveiled new organizational structure, and raised fiscal 2026 adjusted earnings guidance.
2025-08-07SEC Filing (8-K)
-5.76%McKesson reported fiscal 2026 first quarter results and raised full year adjusted EPS guidance.
2024-11-07SEC Filing (8-K)
+10.60%McKesson reports Q2 FY2025 results with 21% revenue growth and raises full-year adjusted EPS guidance to $32.40-$33.00
2024-09-05SEC Filing (8-K)
-9.90%McKesson affirmed fiscal 2025 adjusted earnings guidance at Wells Fargo Healthcare Conference.
Valuation Table
9.8/10Decision Grade
Scenario Range
$5
Bear
$4
Base
$7
Bull
$931