According to Zacks, “McKesson depends heavily on the pharmaceutical distribution business, which is characterized by slow growth. Unfavorable movements in foreign exchange rates continue to hurt sales. In addition McKesson expects weaker generic pharmaceutical pricing trends, specific to the company’s mix of business, in 2017. Moreover, the expiration of McKesson’s contract with Optum will be a major headwind. Operating performance of Celesio which was disappointing in the fiscal first quarter of 2017 due to reimbursement cuts, is expected to continue through the year. However, the company has been actively pursuing deals and acquisitions to drive growth. McKesson will separate its Technology business into a new healthcare information technology company, which is slated to close in the first half of calendar 2017. The spin-off will enable the company to concentrate on the primary pharmaceuticals distribution business.”
Other equities research analysts have also issued research reports about the company. FBR & Co restated a buy rating on shares of McKesson Corp. in a research report on Saturday, June 4th. Morgan Stanley upped their price objective on McKesson Corp. from $199.00 to $211.00 and gave the stock an overweight rating in a research report on Thursday, July 28th. Citigroup Inc. upped their price objective on McKesson Corp. from $215.00 to $225.00 and gave the stock a buy rating in a research report on Thursday, July 28th. Mizuho upped their price objective on McKesson Corp. from $174.00 to $197.00 and gave the stock a neutral rating in a research report on Thursday, August 11th. Finally, Deutsche Bank AG restated a buy rating on shares of McKesson Corp. in a research report on Monday, July 18th. One analyst has rated the stock with a sell rating, eight have issued a hold rating, ten have assigned a buy rating and one has issued a strong buy rating to the company’s stock. The company currently has a consensus rating of Buy and an average target price of $201.17.
McKesson Corp. (NYSE:MCK) traded down 0.31% during midday trading on Thursday, reaching $163.91. 186,136 shares of the company’s stock were exchanged. McKesson Corp. has a 52 week low of $148.29 and a 52 week high of $202.20. The firm has a market capitalization of $36.99 billion, a price-to-earnings ratio of 17.02 and a beta of 0.95. The firm’s 50 day moving average is $180.24 and its 200 day moving average is $178.81.
McKesson Corp. (NYSE:MCK) last issued its earnings results on Wednesday, July 27th. The company reported $3.50 EPS for the quarter, beating the Zacks’ consensus estimate of $3.33 by $0.17. The firm had revenue of $49.73 billion for the quarter, compared to analyst estimates of $50.32 billion. McKesson Corp. had a return on equity of 31.62% and a net margin of 1.15%. McKesson Corp.’s revenue for the quarter was up 4.6% on a year-over-year basis. During the same quarter in the prior year, the firm earned $3.14 earnings per share. On average, equities analysts anticipate that McKesson Corp. will post $13.63 earnings per share for the current year.
The business also recently declared a quarterly dividend, which will be paid on Monday, October 3rd. Stockholders of record on Thursday, September 1st will be issued a dividend of $0.28 per share. The ex-dividend date is Tuesday, August 30th. This represents a $1.12 annualized dividend and a dividend yield of 0.68%. McKesson Corp.’s dividend payout ratio is presently 11.64%.
In related news, Director Wayne A. Budd sold 2,309 shares of the business’s stock in a transaction dated Monday, September 12th. The shares were sold at an average price of $179.70, for a total value of $414,927.30. Following the sale, the director now directly owns 723 shares in the company, valued at approximately $129,923.10. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CFO James A. Beer sold 5,500 shares of the business’s stock in a transaction dated Thursday, July 14th. The shares were sold at an average price of $199.00, for a total transaction of $1,094,500.00. Following the completion of the sale, the chief financial officer now owns 12,412 shares in the company, valued at $2,469,988. The disclosure for this sale can be found here. Insiders own 1.15% of the company’s stock.
A number of hedge funds have recently modified their holdings of MCK. Virginia Retirement System bought a new stake in shares of McKesson Corp. during the first quarter valued at about $587,000. Bowling Portfolio Management LLC purchased a new position in McKesson Corp. during the first quarter valued at $2,675,000. Addenda Capital Inc. increased its position in McKesson Corp. by 5.4% in the first quarter. Addenda Capital Inc. now owns 16,846 shares of the company’s stock valued at $2,497,000 after buying an additional 865 shares in the last quarter. CQS Cayman LP purchased a new position in McKesson Corp. during the first quarter valued at $7,142,000. Finally, Pacad Investment Ltd. increased its position in McKesson Corp. by 40.3% in the first quarter. Pacad Investment Ltd. now owns 28,961 shares of the company’s stock valued at $4,554,000 after buying an additional 8,319 shares in the last quarter. Hedge funds and other institutional investors own 84.77% of the company’s stock.
McKesson Corp. Company Profile
McKesson Corporation (McKesson) is a pharmaceutical distribution services and information technology company. The Company delivers an offering of pharmaceuticals and medical supplies. It operates through two segments: McKesson Distribution Solutions and McKesson Technology Solutions. The Distribution Solutions segment distributes branded and generic pharmaceutical drugs and other healthcare-related products around the world and provides practice management, technology, clinical support and business solutions to community-based oncology and other specialty practices.
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