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McKesson Corporation (NYSE:MCK) Full-Year Results: Here's What Analysts Are Forecasting For This Year

Investors in McKesson Corporation (NYSE:MCK) had a good week, as its shares rose 2.4% to close at US$544 following the release of its annual results. Results were roughly in line with estimates, with revenues of US$309b and statutory earnings per share of US$22.39. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for McKesson

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Following the latest results, McKesson's 15 analysts are now forecasting revenues of US$351.5b in 2025. This would be a notable 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 23% to US$28.21. Before this earnings report, the analysts had been forecasting revenues of US$337.8b and earnings per share (EPS) of US$27.81 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

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It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$575, implying that the uplift in revenue is not expected to greatly contribute to McKesson's valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic McKesson analyst has a price target of US$671 per share, while the most pessimistic values it at US$410. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await McKesson shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that McKesson's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that McKesson is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$575, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple McKesson analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for McKesson that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.