McKesson (NYSE:MCK) Announces Quarterly Earnings Results, Beats Estimates By $0.37 EPS

McKesson (NYSE:MCK) announced its quarterly earnings data on Wednesday. The company reported $9.93 earnings per share (EPS) for the quarter, topping the consensus estimate of $9.56 by $0.37, FiscalAI reports. McKesson had a negative return on equity of 345.35% and a net margin of 1.18%.The firm had revenue of $105.38 billion during the quarter, compared to the consensus estimate of $103.88 billion. McKesson updated its FY 2027 guidance to 44.200-45.000 EPS.

Here are the key takeaways from McKesson’s conference call:

• Strong first-quarter results: Revenue rose 8% to $105.4 billion, adjusted EPS increased 20% to $9.93, and operating profit grew 16%, with three segments delivering double-digit operating-profit growth.
• McKesson raised fiscal 2027 adjusted EPS guidance to $44.20-$45.00 from $43.80-$44.60, citing continued momentum, stable utilization, specialty growth, and confidence in execution.
• North American Pharmaceutical operating profit increased 19%, while Oncology & Multispecialty operating profit rose 41% and Prescription Technology Solutions grew 13%; GLP-1 distribution revenue also climbed 24% year over year to $15 billion.
• The company returned $2.6 billion to shareholders in the quarter, approved a 15% dividend increase, and plans approximately $5 billion of fiscal 2027 share repurchases.
• Medical-Surgical Solutions operating profit fell 20% to $195 million due to product mix and a one-time administrative expense, while the separation requires additional financing and is expected to generate $295 million-$325 million in annual noncontrolling-interest expense.

McKesson Trading Up 5.2%

NYSE:MCK traded up $43.58 during trading hours on Wednesday, hitting $874.01. 1,142,514 shares of the company traded hands, compared to its average volume of 947,883. The stock has a market capitalization of $102.33 billion, a price-to-earnings ratio of 22.72, a P/E/G ratio of 1.36 and a beta of 0.30. The firm has a 50-day moving average of $793.42 and a 200 day moving average of $840.32. McKesson has a twelve month low of $637.00 and a twelve month high of $999.00.

McKesson Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Tuesday, September 1st will be given a dividend of $0.94 per share. This represents a $3.76 dividend on an annualized basis and a yield of 0.4%. This is an increase from McKesson’s previous quarterly dividend of $0.82. The ex-dividend date of this dividend is Tuesday, September 1st. McKesson’s payout ratio is presently 8.53%.

McKesson News Roundup

Here are the key news stories impacting McKesson this week:

• Positive Sentiment: Quarterly earnings beat expectations: McKesson reported fiscal first-quarter adjusted EPS of $9.93, above the $9.56 consensus estimate, while revenue of $105.38 billion exceeded expectations of $103.88 billion. The results point to resilient demand and operating performance. McKesson quarterly earnings report
• Positive Sentiment: Full-year EPS guidance raised: McKesson issued fiscal 2027 EPS guidance of $44.20 to $45.00, with a midpoint of $44.60—above the $44.27 analyst consensus. The improved outlook is likely the primary catalyst for investor optimism. McKesson fiscal 2027 first-quarter results
• Positive Sentiment: Value-oriented investor interest: Recent coverage identifies McKesson among healthcare stocks with long-term upside potential, which may attract investors seeking defensive exposure and relatively dependable earnings growth. Barron’s healthcare stocks article
• Neutral Sentiment: Revenue outlook is broadly in line: Fiscal 2027 revenue guidance of $423.6 billion to $439.7 billion implies a midpoint of approximately $431.65 billion, slightly below the $431.9 billion consensus. This modest shortfall is offset by the stronger EPS outlook.
• Negative Sentiment: Thin margins remain a risk: McKesson reported a net margin of 1.18%, highlighting the low-margin nature of pharmaceutical distribution. Its reported negative return on equity may also remain a concern, although it is influenced by the company’s capital structure and shareholder-return activity.

Wall Street Analyst Weigh In

Several analysts recently commented on the stock. Deutsche Bank Aktiengesellschaft restated a “buy” rating and set a $875.00 price target on shares of McKesson in a report on Friday, May 8th. TD Cowen decreased their target price on shares of McKesson from $1,012.00 to $989.00 and set a “buy” rating for the company in a research note on Tuesday, July 21st. Citigroup increased their price objective on McKesson from $945.00 to $1,000.00 and gave the stock a “buy” rating in a report on Friday, July 24th. Wells Fargo & Company lowered their target price on McKesson from $925.00 to $812.00 and set an “equal weight” rating on the stock in a research note on Tuesday, May 12th. Finally, Weiss Ratings lowered McKesson from a “buy (b)” rating to a “buy (b-)” rating in a report on Tuesday, July 7th. Fourteen analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company’s stock. According to data from MarketBeat, McKesson has a consensus rating of “Moderate Buy” and an average price target of $962.67.

Insider Activity at McKesson

In related news, EVP Thomas L. Rodgers sold 2,388 shares of the stock in a transaction dated Tuesday, May 26th. The shares were sold at an average price of $761.09, for a total value of $1,817,482.92. Following the completion of the sale, the executive vice president owned 3,090 shares in the company, valued at approximately $2,351,768.10. This trade represents a 43.59% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, EVP Michele Lau sold 3,550 shares of the business’s stock in a transaction dated Tuesday, May 26th. The shares were sold at an average price of $761.09, for a total value of $2,701,869.50. Following the transaction, the executive vice president owned 3,247 shares in the company, valued at $2,471,259.23. This represents a 52.23% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 28,748 shares of company stock worth $22,262,035 over the last ninety days. Corporate insiders own 0.06% of the company’s stock.

Institutional Investors Weigh In On McKesson

Institutional investors have recently bought and sold shares of the business. University of Texas Texas AM Investment Management Co. bought a new position in McKesson during the fourth quarter worth about $25,000. Swiss RE Ltd. acquired a new position in shares of McKesson in the 4th quarter worth approximately $26,000. State of Wyoming bought a new position in shares of McKesson during the 2nd quarter worth approximately $29,000. Birchwood Financial Partners Inc. acquired a new stake in McKesson in the 4th quarter valued at $33,000. Finally, Kemnay Advisory Services Inc. acquired a new stake in McKesson in the 4th quarter valued at $39,000. Institutional investors and hedge funds own 85.07% of the company’s stock.

About McKesson

McKesson Corporation (NYSE: MCK) is a global healthcare services and distribution company that supplies pharmaceuticals, medical-surgical products and health care technology solutions. Founded in 1833 and headquartered in Irving, Texas, McKesson operates across the drug distribution and healthcare services value chain, connecting manufacturers, pharmacies, hospitals and health systems to help manage the movement of medicines and clinical supplies.

The company’s core activities include pharmaceutical wholesale distribution and logistics, specialty pharmacy services, and the provision of medical-surgical supplies to acute and non-acute care providers.