Update shared on 19 Nov 2025
Fair value Increased 11%McKesson's analyst price target has been raised significantly, increasing by nearly $90 per share to $934.71. Analysts cite strong momentum in North American Pharma, higher long-term EPS guidance, and robust industry trends supporting continued growth.
Analyst Commentary
Recent coverage highlights a wave of optimism among analysts regarding McKesson's financial outlook and execution. Notably, several firms have raised their price targets significantly following the company’s investor day and updated guidance for fiscal 2026. While enthusiasm is high, some analysts note factors to keep an eye on as the company moves forward.
Bullish Takeaways- Analysts are encouraged by robust core AOI growth projections for the North American Pharma segment, which is expected to deliver around 7% growth in fiscal 2026.
- McKesson’s decision to raise its long-term EPS growth target to 13% to 16% signals confidence in sustained expansion and stronger performance relative to industry peers.
- Operational transparency and the simplification of reporting segments have enhanced visibility into McKesson’s core businesses, supporting higher valuation multiples.
- Increased investment and strategic focus on oncology, multispecialty, and biopharma are seen as key long-term growth drivers, with higher margins and meaningful runway ahead.
- Some analysts remain cautious about increased second half investments, viewing upcoming spending as a potential drag on near-term margins and profitability.
- The updated long-term guidance is considered ambitious, and any industry slowdown or execution missteps could pressure McKesson’s ability to meet these elevated expectations.
- Despite overall strength, a few firms maintain neutral ratings, reflecting concerns about valuation levels after recent share price gains and the company’s ability to sustain momentum in a competitive environment.
What's in the News
- The Trump administration is preparing a new probe into U.S. pharmaceutical prices, examining whether trading partners are underpaying for drugs. This investigation could affect major distributors like McKesson (The Financial Times).
- McKesson has completed a large share repurchase, buying back 1,200,000 shares for $824.35 million in the latest tranche. The company has now repurchased over 63.2 million shares since 2018.
- Citius Oncology selected McKesson as an authorized distributor for LYMPHIR, a newly approved immunotherapy. This expands McKesson's role in supporting access to innovative cancer treatments.
- Playhouse MD launched its pediatric healthcare line on Amazon through a new distribution alliance with McKesson Medical-Surgical. This marks the debut of a play-based pediatric brand within the distributor’s portfolio.
Valuation Changes
- Consensus Analyst Price Target: Increased substantially from $844.57 to $934.71, reflecting heightened confidence in future performance.
- Discount Rate: Edged up modestly from 6.78% to 6.96%, indicating a slightly higher risk assessment in valuation models.
- Revenue Growth: Declined from 8.89% to 8.41%, signaling tempered expectations for top-line expansion.
- Net Profit Margin: Improved from 1.14% to 1.27%, highlighting progress in operational efficiency and profitability.
- Future P/E: Marginally decreased from 21.65x to 21.41x, suggesting minor shifts in analyst expectations for earnings multiples.
Disclaimer
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