McKesson Rises Yet Lags Behind Market: Some Facts Worth Knowing

The most recent trading session ended with McKesson MCK standing at $511.17, reflecting a +0.14% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.75% gain on the day. Elsewhere, the Dow saw an upswing of 0.58%, while the tech-heavy Nasdaq appreciated by 1%.

The prescription drug distributor's shares have seen a decrease of 7.67% over the last month, not keeping up with the Medical sector's gain of 3.55% and the S&P 500's gain of 4.03%.

The investment community will be paying close attention to the earnings performance of McKesson in its upcoming release. It is anticipated that the company will report an EPS of $7.20, marking a 15.57% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $89.57 billion, up 16% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $32.11 per share and a revenue of $353.29 billion, signifying shifts of +17.02% and +14.35%, respectively, from the last year.

Investors should also take note of any recent adjustments to analyst estimates for McKesson. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.25% higher within the past month. At present, McKesson boasts a Zacks Rank of #3 (Hold).

With respect to valuation, McKesson is currently being traded at a Forward P/E ratio of 15.9. This represents a discount compared to its industry's average Forward P/E of 18.11.

We can also see that MCK currently has a PEG ratio of 1.18. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Medical - Dental Supplies industry stood at 1.88 at the close of the market yesterday.

The Medical - Dental Supplies industry is part of the Medical sector. With its current Zacks Industry Rank of 176, this industry ranks in the bottom 31% of all industries, numbering over 250.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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