J.P. Morgan Maintains Overweight on McKesson

J.P. Morgan is out with its report today on McKesson MCK, maintaining Overweight. In a note to clients, J.P. Morgan writes, "Our rating on McKesson is Overweight. We continue to point to the positive fundamental outlook for the drug distribution industry, and believe several key factors should continue to drive strong growth for McKesson going forward, including: generics, acquisition integration, improvements in the healthcare IT business and accretive uses of cash flow. McKesson recently introduced F2012 guidance on an adjusted ‘cash' EPS basis of $5.99 to $6.19, which implies 11% to 14% EPS growth year-over-year. McKesson shares trade at 15.6x our unadjusted CY11E EPS estimate of $5.46, a slight discount to AmerisourceBergen and Cardinal. We view the discount as unwarranted given the growth prospects for McKesson going forward and as such, believe current levels offer an attractive entry point." J.P. Morgan maintains a $100 PT on MCK. Shares of MCK closed Friday at $85.07, down 1.81% from Thursday's close.