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McKesson (MCK) Stock Sinks As Market Gains: Here's Why

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In the latest trading session, McKesson (MCK - Free Report) closed at $479.06, marking a -0.02% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.4%. Elsewhere, the Dow gained 0.62%, while the tech-heavy Nasdaq added 0.6%.

Prior to today's trading, shares of the prescription drug distributor had lost 13.93% over the past month. This has lagged the Medical sector's loss of 2.27% and the S&P 500's gain of 1.71% in that time.

Analysts and investors alike will be keeping a close eye on the performance of McKesson in its upcoming earnings disclosure. The company's earnings report is set to go public on November 6, 2024. The company's earnings per share (EPS) are projected to be $7.09, reflecting a 13.8% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $89.57 billion, up 16% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $32.07 per share and revenue of $353.23 billion, indicating changes of +16.87% and +14.33%, respectively, compared to the previous year.

Any recent changes to analyst estimates for McKesson should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.1% lower within the past month. McKesson is currently a Zacks Rank #3 (Hold).

In terms of valuation, McKesson is currently trading at a Forward P/E ratio of 14.94. This valuation marks a discount compared to its industry's average Forward P/E of 18.16.

Meanwhile, MCK's PEG ratio is currently 1.12. 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. By the end of yesterday's trading, the Medical - Dental Supplies industry had an average PEG ratio of 1.92.

The Medical - Dental Supplies industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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