UPDATE: Citigroup Raises PT to $102 on McKesson

Citigroup increases its price target to $102 on Buy-rated McKesson MCK on delays of a VA contract that keeps the company servicing while a potential repricing may provide additional upside. Citigroup says, "The Veterans Affairs (VA) contract that was expected to be announced this week appears to be delayed until at least mid-April. Buy-rated McKesson is the primary pharmaceutical vendor on the ~$4.3B contract and has serviced the contract since 2004. Given that a contract switch would likely require ~90 days for a new vendor to implement, we suspect that McKesson will service the contact for a meaningful period beyond the scheduled May 9, 2012 termination date, causing us to raise our estimates as any repricing of the contract, or a potential contract loss, gets pushed out." MCK closed at $88.59 a share yesterday.