Zacks Investment Research Downgrades McKesson (MCK) to Hold

McKesson (NYSE:MCK) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued to investors on Monday.

According to Zacks, “McKesson has had a favorable run on the bourses over the last three months. Apart from the company’s balanced segmental and geographic show, we are upbeat about the recent acquisition of RxCrossroads which should strengthen the company’s foothold in pharmaceutical and biotechnology space. Among other buyouts, the purchase of retailer Well.ca is expected to bring online commerce capabilities and digital experience to McKesson Canada's retail assets. The company’s strong guidance for fiscal 2018 holds promise. McKesson has had an impressive run on the bourse in the last three months. On the flipside, stiff competition, currency headwind, reimbursement issues remain challenges. Pricing pressure in the independent retail pharmacy channel is a headwind. Particularly, McKesson’s sell-side pricing environment continues to remain competitive with less pricing variability.”

A number of other research firms also recently commented on MCK. Credit Suisse Group reiterated a “sell” rating and set a $130.00 price objective on shares of McKesson in a research note on Friday. Mizuho set a $168.00 price objective on shares of McKesson and gave the company a “hold” rating in a research note on Tuesday, October 24th. ValuEngine upgraded shares of McKesson from a “hold” rating to a “buy” rating in a research note on Tuesday, October 31st. Needham & Company LLC reiterated a “buy” rating and set a $173.00 price objective (down from $178.00) on shares of McKesson in a research note on Wednesday, November 1st. Finally, Jefferies Group upgraded shares of McKesson from a “hold” rating to a “buy” rating and set a $205.00 price objective on the stock in a research note on Wednesday, January 24th. Two research analysts have rated the stock with a sell rating, seven have given a hold rating and ten have assigned a buy rating to the company’s stock. McKesson currently has an average rating of “Hold” and an average target price of $178.97.

McKesson (NYSE MCK) traded down $4.64 during midday trading on Monday, reaching $154.57. 1,199,636 shares of the company’s stock were exchanged, compared to its average volume of 1,752,360. McKesson has a 12-month low of $133.82 and a 12-month high of $178.86. The company has a quick ratio of 0.61, a current ratio of 1.07 and a debt-to-equity ratio of 0.63. The company has a market cap of $32,450.00, a P/E ratio of 6.91, a price-to-earnings-growth ratio of 1.45 and a beta of 1.22.

McKesson (NYSE:MCK) last posted its quarterly earnings data on Thursday, February 1st. The company reported $3.41 EPS for the quarter, beating the Zacks’ consensus estimate of $2.92 by $0.49. McKesson had a net margin of 2.34% and a return on equity of 22.98%. The firm had revenue of $53.62 billion for the quarter, compared to the consensus estimate of $51.98 billion. During the same period in the prior year, the firm posted $3.04 EPS. The firm’s revenue was up 7.0% compared to the same quarter last year. research analysts predict that McKesson will post 12.69 EPS for the current fiscal year.

In other news, Chairman John H. Hammergren sold 65,000 shares of the firm’s stock in a transaction dated Thursday, December 14th. The shares were sold at an average price of $160.00, for a total value of $10,400,000.00. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Company insiders own 1.20% of the company’s stock.

Several institutional investors have recently bought and sold shares of MCK. Boston Partners lifted its position in McKesson by 61.5% in the 4th quarter. Boston Partners now owns 1,815,132 shares of the company’s stock valued at $283,070,000 after purchasing an additional 691,476 shares during the last quarter. Baupost Group LLC MA bought a new stake in McKesson in the 3rd quarter valued at about $76,805,000. Pzena Investment Management LLC lifted its position in McKesson by 17.2% in the 3rd quarter. Pzena Investment Management LLC now owns 2,458,531 shares of the company’s stock valued at $377,655,000 after purchasing an additional 360,676 shares during the last quarter. Dimensional Fund Advisors LP lifted its position in McKesson by 51.5% in the 3rd quarter. Dimensional Fund Advisors LP now owns 1,017,320 shares of the company’s stock valued at $156,273,000 after purchasing an additional 345,865 shares during the last quarter. Finally, Sterling Capital Management LLC lifted its position in McKesson by 2,499.1% in the 2nd quarter. Sterling Capital Management LLC now owns 355,560 shares of the company’s stock valued at $58,504,000 after purchasing an additional 341,880 shares during the last quarter. Institutional investors own 88.03% of the company’s stock.

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About McKesson

McKesson Corporation is a healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology company. The Company provides medicines, medical products and healthcare services by partnering with pharmaceutical manufacturers, providers, pharmacies, governments and other organizations in healthcare.

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