J.P. Morgan Rates McKesson Overweight

According to J.P. Morgan, McKesson MCK is rated Overweight. J.P. Morgan said that as part of McKesson Week it hosted a conference call with CEO John Hammergren today. “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 15.3x our unadjusted CY11 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.” McKesson closed yesterday at $83.51.