McKesson (MCK) Valuation Check as Shares Tick Higher on Optimism Ahead of Earnings

McKesson (MCK) edged up about 1% even as the broader market slipped, with traders positioning ahead of earnings that are expected to show double digit growth in both EPS and revenue versus last year.

See our latest analysis for McKesson.

That optimism is riding on the back of strong momentum, with McKesson’s share price up 17.68% over the past 90 days and a 44.87% year to date share price return, while its five year total shareholder return of 394.81% shows how consistently the story has been rewarded.

If McKesson’s run has you rethinking your healthcare exposure, now could be a good time to scan for other potential winners among healthcare stocks.

But with the stock hovering near record highs, yet still trading at a steep discount to some intrinsic value estimates, investors face a key question: Is McKesson undervalued, or is the market already pricing in its future growth?

Most Popular Narrative: 12.7% Undervalued

With McKesson closing at $820.25 versus a narrative fair value near $939, the current price implies the market is not fully reflecting its projected earnings power.

Investments in digitization, automation, and advanced analytics across distribution centers and logistics (e.g., automated picking systems, AI, robotics) are enhancing operational efficiency, driving measurable reductions in operating expenses and supporting long-term net margin improvement.

Read the complete narrative.

Want to see what happens when modest revenue growth, rising margins, and a premium future earnings multiple all come together in one model? The narrative lays out a detailed path, step by step, using a 6.96 percent discount rate to translate those assumptions into today’s fair value.

Result: Fair Value of $939.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heightened regulatory pressure on drug pricing and ongoing vertical integration across payers and PBMs could squeeze margins and erode McKesson’s wholesale economics.

Find out about the key risks to this McKesson narrative.

Build Your Own McKesson Narrative

If you see the numbers differently or want to stress test your own assumptions, you can quickly build a custom McKesson narrative yourself: Do it your way.

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.

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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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