Stock of the Day

July 15, 2019

McKesson (MCK)

$707.13
-$2.33 (-0.3%)
Market Cap: $88.38B

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 is around $721, reflecting a strong market position and investor confidence in the company's future growth.
  • Recent upgrades from multiple analysts, including a target price increase to $805, indicate positive sentiment and potential for stock appreciation.
  • McKesson Co. has a solid market capitalization of approximately $90 billion, suggesting stability and a strong presence in the healthcare sector.
  • With a majority of shares (over 85%) held by institutional investors, there is a level of confidence from large financial entities in the company's performance.
  • The stock has shown resilience with a relatively low beta of 0.53, indicating less volatility compared to the overall market, which can be appealing for risk-averse investors.

McKesson Bear Case

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

  • Insider selling has been significant, with executives selling over 13,000 shares recently, which may raise concerns about their confidence in the company's future performance.
  • The stock has experienced fluctuations, with a 52-week low of $464.42, indicating potential volatility that could deter some investors.
  • Recent downgrades from certain analysts, including a shift from a "moderate buy" to a "hold" rating, suggest caution regarding the stock's short-term prospects.
  • The P/E ratio of 33.03 is relatively high, which may indicate that the stock is overvalued compared to its earnings, potentially limiting future upside.
  • Market conditions and economic uncertainties could impact the healthcare sector, which may affect McKesson Co.'s performance and stock price.
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