McKesson (MCK) Gains As Market Dips: What You Should Know
In the latest trading session, McKesson (MCK) closed at $354.48, marking a +1.45% move from the previous day. This move outpaced the S&P 500's daily loss of 0.16%. Elsewhere, the Dow lost 0.12%, while the tech-heavy Nasdaq lost 3.64%.
Coming into today, shares of the prescription drug distributor had lost 1.67% in the past month. In that same time, the Medical sector gained 0.9%, while the S&P 500 gained 0.07%.
Investors will be hoping for strength from McKesson as it approaches its next earnings release. On that day, McKesson is projected to report earnings of $7.14 per share, which would represent year-over-year growth of 22.47%. Our most recent consensus estimate is calling for quarterly revenue of $67.93 billion, up 2.77% from the year-ago period.
MCK's full-year Zacks Consensus Estimates are calling for earnings of $25.93 per share and revenue of $275.74 billion. These results would represent year-over-year changes of +9.46% and +4.46%, respectively.
Investors should also note any recent changes to analyst estimates for McKesson. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. McKesson is holding a Zacks Rank of #2 (Buy) right now.
Digging into valuation, McKesson currently has a Forward P/E ratio of 13.48. For comparison, its industry has an average Forward P/E of 19.98, which means McKesson is trading at a discount to the group.
We can also see that MCK currently has a PEG ratio of 1.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Dental Supplies industry currently had an average PEG ratio of 2.05 as of yesterday's close.
The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 51, putting it in the top 21% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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