McKesson Corporation

NYSE:MCK Stock Report

Market Cap: US$79.3b

McKesson Valuation

Is MCK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of MCK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MCK ($610.16) is trading below our estimate of fair value ($1491.18)

Significantly Below Fair Value: MCK is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MCK?

Key metric: As MCK is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for MCK. This is calculated by dividing MCK's market cap by their current earnings.
What is MCK's PE Ratio?
PE Ratio30.5x
EarningsUS$2.54b
Market CapUS$79.29b

Price to Earnings Ratio vs Peers

How does MCK's PE Ratio compare to its peers?

The above table shows the PE ratio for MCK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average23.7x
COR Cencora
31.6x14.6%US$49.0b
CAH Cardinal Health
22.9x7.7%US$30.3b
HSIC Henry Schein
26.4x26.7%US$8.4b
CVS CVS Health
13.8x17.5%US$68.3b
MCK McKesson
30.5x15.0%US$79.3b

Price-To-Earnings vs Peers: MCK is expensive based on its Price-To-Earnings Ratio (30.5x) compared to the peer average (23.7x).

Price to Earnings Ratio vs Industry

How does MCK's PE Ratio compare vs other companies in the US Healthcare Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
NEUE NeueHealth
1.5xn/aUS$38.43m
IDXG Interpace Biosciences
2.8xn/aUS$14.43m
FZMD Fuse Medical
1.1xn/aUS$5.56m
No more companies available in this PE range
MCK 30.5xIndustry Avg. 24.8xNo. of Companies11PE01632486480+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: MCK is expensive based on its Price-To-Earnings Ratio (30.5x) compared to the US Healthcare industry average (24.8x).

Price to Earnings Ratio vs Fair Ratio

What is MCK's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MCK PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio30.5x
Fair PE Ratio38.8x

Price-To-Earnings vs Fair Ratio: MCK is good value based on its Price-To-Earnings Ratio (30.5x) compared to the estimated Fair Price-To-Earnings Ratio (38.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst MCK forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$610.16
US$629.25
+3.1%
10.5%US$713.00US$496.00n/a16
Nov ’25US$526.34
US$584.00
+11.0%
9.0%US$661.00US$490.00n/a16
Oct ’25US$498.48
US$605.28
+21.4%
8.4%US$670.00US$490.00n/a16
Sep ’25US$561.08
US$624.09
+11.2%
7.5%US$671.00US$490.00n/a16
Aug ’25US$629.09
US$620.45
-1.4%
10.5%US$700.00US$460.00n/a16
Jul ’25US$586.34
US$599.89
+2.3%
9.0%US$679.00US$460.00n/a16
Jun ’25US$569.59
US$589.51
+3.5%
8.7%US$679.00US$460.00n/a16
May ’25US$531.10
US$562.17
+5.9%
9.2%US$620.00US$410.00n/a17
Apr ’25US$536.49
US$547.41
+2.0%
8.6%US$620.00US$410.00n/a17
Mar ’25US$525.88
US$542.00
+3.1%
8.1%US$600.00US$410.00n/a17
Feb ’25US$501.85
US$510.77
+1.8%
8.3%US$564.00US$400.00n/a16
Jan ’25US$462.98
US$499.79
+7.9%
7.9%US$563.00US$400.00n/a14
Dec ’24US$464.65
US$491.77
+5.8%
7.2%US$530.00US$400.00n/a13
Nov ’24US$459.59
US$481.31
+4.7%
7.5%US$525.00US$395.00US$526.3413
Oct ’24US$434.85
US$474.23
+9.1%
6.4%US$510.00US$395.00US$498.4813
Sep ’24US$412.34
US$475.00
+15.2%
6.2%US$510.00US$395.00US$561.0814
Aug ’24US$405.02
US$450.56
+11.2%
7.2%US$500.00US$375.00US$629.0914
Jul ’24US$427.31
US$444.06
+3.9%
7.7%US$500.00US$375.00US$586.3415
Jun ’24US$389.23
US$435.20
+11.8%
8.3%US$491.00US$348.00US$569.5915
May ’24US$354.01
US$421.20
+19.0%
6.8%US$455.00US$348.00US$531.1015
Apr ’24US$356.05
US$421.57
+18.4%
6.4%US$450.00US$348.00US$536.4915
Mar ’24US$351.75
US$421.68
+19.9%
6.6%US$450.00US$348.00US$525.8814
Feb ’24US$370.98
US$422.11
+13.8%
6.8%US$460.00US$348.00US$501.8514
Jan ’24US$375.12
US$417.18
+11.2%
6.4%US$450.00US$348.00US$462.9814
Dec ’23US$379.72
US$416.77
+9.8%
7.2%US$450.00US$336.00US$464.6513
Nov ’23US$382.04
US$385.85
+1.0%
8.4%US$423.00US$298.00US$459.5913

Analyst Forecast: Target price is less than 20% higher than the current share price.

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