Analysts have raised their average fair value estimate for McKesson to $836.71 from $829.57. This change is attributed to increased long-term growth guidance and improved business visibility following the company’s recent investor day.

Analyst Commentary

Following McKesson’s recent investor day, Street analysts have largely responded by raising their price targets and maintaining positive outlooks on the company’s long-term prospects. The combination of updated financial guidance, strategic clarity, and ongoing investments in high-growth business lines has contributed to a stronger consensus around the stock.

Bullish Takeaways

• Bullish analysts are encouraged by the company’s increased long-term EPS growth guidance, which now stands at 13% to 16%. This supports a higher valuation and reflects confidence in execution.
• The simplification of McKesson’s reporting segments is viewed as enhancing visibility into underlying business performance. This makes projections and management’s targets more credible to investors.
• Updated fiscal 2026 guidance and a focus on higher-margin segments such as oncology, multispecialty, and biopharma have strengthened the case for sustained, profitable growth.
• Several analysts highlight that McKesson’s current forward earnings multiple remains reasonable given its growth profile. This makes the stock appear compelling at these levels.

Bearish Takeaways

• Bearish analysts note that while guidance was raised, the increased long-term earnings growth target may already be largely reflected in the stock’s recent appreciation.
• Some remain cautious about near-term industry pressures that could affect pharma distribution volumes, which may challenge management’s ambitious growth projections.
• A minority of analysts maintain more neutral views, citing a lack of material change in underlying business fundamentals outside the investor day updates and preferring to observe further execution on outlined initiatives before turning more positive.

What's in the News

• The Trump administration is preparing a new probe into U.S. pharma prices and may take action against countries perceived to pay less for drugs. McKesson has been identified as a key player in pharmaceutical distribution (Financial Times).
• Citius Oncology has entered a distribution agreement with McKesson for LYMPHIR, an FDA-approved immunotherapy for cutaneous T-cell lymphoma. This agreement completes national access across major U.S. wholesalers.
• McKesson Medical-Surgical is partnering with Playhouse MD to launch play-based pediatric medical devices on Amazon. This move expands the at-home care portfolio to families nationwide.
• The company repurchased 800,000 shares for $560.16 million from April to June 2025 as part of its ongoing buyback program.
• McKesson's Board of Directors approved a 15% dividend increase to $0.82 per share, payable October 1, 2025.

Valuation Changes

• The Fair Value Estimate has risen slightly to $836.71 from $829.57, reflecting updated assumptions and guidance.
• The Discount Rate remains unchanged at 6.776%.
• The Revenue Growth projection has increased modestly, now at 8.89% compared to the previous 8.66%.
• The Net Profit Margin forecast has edged down slightly to 1.14% from 1.14% previously.
• The Future P/E ratio has increased minimally to 21.45x from 21.31x.