McKesson (NYSE:MCK) Issues Quarterly Earnings Results

McKesson (NYSE:MCK) issued its earnings results on Wednesday. The company reported $9.93 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $9.56 by $0.37, FiscalAI reports. McKesson had a net margin of 1.18% and a negative return on equity of 345.35%. The company had revenue of $105.38 billion during the quarter, compared to analysts’ expectations of $103.88 billion. During the same period last year, the company posted $8.26 earnings per share. The firm’s quarterly revenue was up 7.7% compared to the same quarter last year. McKesson updated its FY 2027 guidance to 44.200-45.000 EPS.

Here are the key takeaways from McKesson’s conference call:

• Strong first-quarter results: Revenue rose 8% to $105.4 billion, adjusted EPS increased 20% to $9.93, and operating profit grew 16%, with three segments delivering double-digit operating-profit growth.
• McKesson raised fiscal 2027 adjusted EPS guidance to $44.20-$45.00 from $43.80-$44.60, citing continued momentum, stable utilization, specialty growth, and confidence in execution.
• North American Pharmaceutical operating profit increased 19%, while Oncology & Multispecialty operating profit rose 41% and Prescription Technology Solutions grew 13%; GLP-1 distribution revenue also climbed 24% year over year to $15 billion.
• The company returned $2.6 billion to shareholders in the quarter, approved a 15% dividend increase, and plans approximately $5 billion of fiscal 2027 share repurchases.
• Medical-Surgical Solutions operating profit fell 20% to $195 million due to product mix and a one-time administrative expense, while the separation requires additional financing and is expected to generate $295 million-$325 million in annual noncontrolling-interest expense.

McKesson Stock Performance

MCK stock traded up $43.58 on Wednesday, reaching $874.01. The company had a trading volume of 1,142,514 shares, compared to its average volume of 947,883. McKesson has a 1 year low of $637.00 and a 1 year high of $999.00. The company’s fifty day moving average is $795.78 and its 200 day moving average is $840.54. The company has a market cap of $102.33 billion, a P/E ratio of 22.72, a PEG ratio of 1.36 and a beta of 0.30.

McKesson Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Tuesday, September 1st will be given a dividend of $0.94 per share. The ex-dividend date is Tuesday, September 1st. This represents a $3.76 annualized dividend and a dividend yield of 0.4%. This is an increase from McKesson’s previous quarterly dividend of $0.82. McKesson’s payout ratio is presently 8.53%.

Key Headlines Impacting McKesson

Here are the key news stories impacting McKesson this week:

• Positive Sentiment: Quarterly earnings beat expectations: McKesson reported fiscal first-quarter adjusted EPS of $9.93, above the $9.56 consensus estimate, while revenue of $105.38 billion exceeded expectations of $103.88 billion. The results point to resilient demand and operating performance. McKesson quarterly earnings report
• Positive Sentiment: Full-year EPS guidance raised: McKesson issued fiscal 2027 EPS guidance of $44.20 to $45.00, with a midpoint of $44.60—above the $44.27 analyst consensus. The improved outlook is likely the primary catalyst for investor optimism. McKesson fiscal 2027 first-quarter results
• Positive Sentiment: Value-oriented investor interest: Recent coverage identifies McKesson among healthcare stocks with long-term upside potential, which may attract investors seeking defensive exposure and relatively dependable earnings growth. Barron’s healthcare stocks article
• Neutral Sentiment: Revenue outlook is broadly in line: Fiscal 2027 revenue guidance of $423.6 billion to $439.7 billion implies a midpoint of approximately $431.65 billion, slightly below the $431.9 billion consensus. This modest shortfall is offset by the stronger EPS outlook.
• Negative Sentiment: Thin margins remain a risk: McKesson reported a net margin of 1.18%, highlighting the low-margin nature of pharmaceutical distribution. Its reported negative return on equity may also remain a concern, although it is influenced by the company’s capital structure and shareholder-return activity.

Insider Buying and Selling

In other news, EVP Michele Lau sold 3,550 shares of the company’s stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $761.09, for a total value of $2,701,869.50. Following the sale, the executive vice president directly owned 3,247 shares in the company, valued at $2,471,259.23. This represents a 52.23% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thomas L. Rodgers sold 699 shares of the stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $735.27, for a total value of $513,953.73. Following the sale, the executive vice president directly owned 2,268 shares in the company, valued at approximately $1,667,592.36. The trade was a 23.56% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 28,748 shares of company stock worth $22,262,035 in the last 90 days. Corporate insiders own 0.06% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in MCK. SurgoCap Partners LP grew its holdings in shares of McKesson by 68.7% during the third quarter. SurgoCap Partners LP now owns 452,261 shares of the company’s stock worth $349,390,000 after buying an additional 184,106 shares in the last quarter. Wellington Management Group LLP lifted its stake in shares of McKesson by 32.9% during the third quarter. Wellington Management Group LLP now owns 618,984 shares of the company’s stock valued at $478,190,000 after buying an additional 153,182 shares during the period. Invesco Ltd. lifted its stake in shares of McKesson by 9.5% during the fourth quarter. Invesco Ltd. now owns 1,052,739 shares of the company’s stock valued at $863,551,000 after buying an additional 90,982 shares during the period. AQR Capital Management LLC boosted its position in McKesson by 10.8% during the fourth quarter. AQR Capital Management LLC now owns 918,785 shares of the company’s stock worth $753,671,000 after acquiring an additional 89,747 shares during the last quarter. Finally, Canada Pension Plan Investment Board boosted its position in McKesson by 443.0% during the second quarter. Canada Pension Plan Investment Board now owns 105,613 shares of the company’s stock worth $77,391,000 after acquiring an additional 86,162 shares during the last quarter. Institutional investors and hedge funds own 85.07% of the company’s stock.

Analyst Ratings Changes

A number of research firms recently weighed in on MCK. Wells Fargo & Company lowered their price target on McKesson from $925.00 to $812.00 and set an “equal weight” rating on the stock in a report on Tuesday, May 12th. Weiss Ratings cut McKesson from a “buy (b)” rating to a “buy (b-)” rating in a report on Tuesday, July 7th. TD Cowen decreased their target price on McKesson from $1,012.00 to $989.00 and set a “buy” rating on the stock in a research report on Tuesday, July 21st. Citigroup upped their target price on McKesson from $945.00 to $1,000.00 and gave the company a “buy” rating in a report on Friday, July 24th. Finally, Wall Street Zen downgraded McKesson from a “buy” rating to a “hold” rating in a research note on Saturday, June 27th. Fourteen investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat, McKesson currently has a consensus rating of “Moderate Buy” and a consensus price target of $962.67.

About McKesson

McKesson Corporation (NYSE: MCK) is a global healthcare services and distribution company that supplies pharmaceuticals, medical-surgical products and health care technology solutions. Founded in 1833 and headquartered in Irving, Texas, McKesson operates across the drug distribution and healthcare services value chain, connecting manufacturers, pharmacies, hospitals and health systems to help manage the movement of medicines and clinical supplies.

The company’s core activities include pharmaceutical wholesale distribution and logistics, specialty pharmacy services, and the provision of medical-surgical supplies to acute and non-acute care providers.