McKesson (MCK) Stock Sinks As Market Gains: What You Should Know
McKesson (MCK) closed the most recent trading day at $379.20, moving -1.28% from the previous trading session. This change lagged the S&P 500's 0.25% gain on the day. Meanwhile, the Dow gained 0.08%, and the Nasdaq, a tech-heavy index, added 7.26%.
Heading into today, shares of the prescription drug distributor had gained 2.4% over the past month, outpacing the Medical sector's loss of 0.75% and lagging the S&P 500's gain of 5.73% in that time.
McKesson will be looking to display strength as it nears its next earnings release, which is expected to be February 1, 2023. The company is expected to report EPS of $6.34, up 3.09% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $70.48 billion, up 2.72% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.78 per share and revenue of $275.58 billion. These totals would mark changes of +4.6% and +4.4%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for McKesson. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
In terms of valuation, McKesson is currently trading at a Forward P/E ratio of 15.5. Its industry sports an average Forward P/E of 20.35, so we one might conclude that McKesson is trading at a discount comparatively.
Also, we should mention that MCK has a PEG ratio of 1.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Medical - Dental Supplies stocks are, on average, holding a PEG ratio of 2.27 based on yesterday's closing prices.
The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 72, putting it in the top 29% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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