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McKesson (MCK) Sees a More Significant Dip Than Broader Market: Some Facts to Know

In the latest market close, McKesson (MCK) reached $589.95, with a -0.19% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.04%. Meanwhile, the Dow experienced a drop of 0.15%, and the technology-dominated Nasdaq saw an increase of 0.12%.

Heading into today, shares of the prescription drug distributor had gained 6.35% over the past month, outpacing the Medical sector's gain of 2.3% and the S&P 500's gain of 4.15% in that time.

Market participants will be closely following the financial results of McKesson in its upcoming release. The company is expected to report EPS of $7.18, down 1.24% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $83.36 billion, indicating a 11.92% increase compared to the same quarter of the previous year.

MCK's full-year Zacks Consensus Estimates are calling for earnings of $31.47 per share and revenue of $354.8 billion. These results would represent year-over-year changes of +14.69% and +14.84%, respectively.

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Investors might also notice recent changes to analyst estimates for McKesson. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.04% decrease. McKesson currently has a Zacks Rank of #3 (Hold).

In the context of valuation, McKesson is at present trading with a Forward P/E ratio of 18.78. Its industry sports an average Forward P/E of 18.29, so one might conclude that McKesson is trading at a premium comparatively.

We can additionally observe that MCK currently boasts a PEG ratio of 1.39. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. MCK's industry had an average PEG ratio of 1.91 as of yesterday's close.

The Medical - Dental Supplies industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 179, finds itself in the bottom 29% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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McKesson Corporation (MCK) : Free Stock Analysis Report

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