How McKesson’s (MCK) Earnings Beat, Dividend Hike, and Spin-Off Plans Have Changed Its Investment Story

• McKesson Corporation recently reported first-quarter fiscal 2026 results, posting US$97.83 billion in sales and US$784 million in net income, and announced a 15% increase in its regular dividend to US$0.82 per share.
• In addition to raising its full-year earnings guidance, McKesson revealed plans to spin off its Medical-Surgical Solutions segment and completed acquisitions to strengthen its specialty and oncology platforms.
• We will explore how McKesson’s raised earnings guidance and planned business separation could influence its future investment narrative.

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McKesson Investment Narrative Recap

To be a McKesson shareholder, you need to believe in the company’s ability to drive growth through specialty pharmaceutical and technology solutions, while navigating variability in the Medical-Surgical segment. The recent earnings report, showing higher sales but a dip in net income and EPS, puts the spotlight on short-term execution and signals that impacts from ongoing softness in Medical-Surgical volumes remain a central risk; the updated guidance is meaningful for near-term sentiment.

Among the latest developments, McKesson’s plan to spin off its Medical-Surgical Solutions segment stands out as most relevant. This move aims to sharpen operational focus, but in the context of catalysts, the separation could affect both growth potential in biopharma services and the financial exposure to heavier swings in medical supply demand.

But investors should also be aware of the risk that persists if volumes in the Medical-Surgical business fall further due to shifting demand patterns...

Read the full narrative on McKesson (it's free!)

McKesson's outlook anticipates $472.0 billion in revenue and $5.2 billion in earnings by 2028. This projection assumes 9.5% annual revenue growth and a $1.9 billion increase in earnings from the current $3.3 billion.

Uncover how McKesson's forecasts yield a $779.79 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community range widely from US$566 to US$1,427 per share. While some expect significant upside, the softening Medical-Surgical volumes highlight how investor outlooks can shift and why you should check other views.

Explore 3 other fair value estimates on McKesson - why the stock might be worth over 2x more than the current price!

Build Your Own McKesson Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your McKesson research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free McKesson research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate McKesson's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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