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SummaryMcKesson Corp. stands out as an asset-heavy distributor poised to benefit from AI-driven prescription automation and expedited FDA rare-disease drug approvals.MCK’s specialty and oncology segment, with 41% YoY profit growth and superior margins, insulates it from AI disintermediation risks affecting vertically integrated telehealth peers.Despite materially faster EPS growth (24% forward GAAP), MCK trades at only a modest premium (forward P/E 25.75x), with a PEG ratio of 0.55x, suggesting undervaluation.Risks include potential U.S. drug-pricing policy changes, but management maintains a robust FY-27 outlook and expects 13.5–17.5% operating-profit growth in oncology and specialty.To illustrate how disruption may impact healthcare, making an analogy with the IT world, namely ServiceNow, is useful. SeventyFour/iStock via Getty Images

Healthcare has benefited from AI woes, mostly as a defensive trade, but this could change in 2027 as the pilot projects launched this year to automate drug prescriptions conclude. Additionally, the FDA (Food and Drug Administration) is overhauling procedures to speed

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IRVING, Texas--(BUSINESS WIRE)--The Board of Directors of McKesson Corporation (NYSE:MCK) yesterday declared a regular dividend of 94 cents per share of common stock. The dividend will be payable on January 4, 2027, to shareholders of record on December 1, 2026. About McKesson Corporation McKesson Corporation is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufact.

McKesson (MCK - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this prescription drug distributor have returned +15.6%, compared to the Zacks S&P 500 composite's +0.7% change. During this period, the Zacks Medical - Dental Supplies industry, which McKesson falls in, has gained 11.7%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, McKesson is expected to post earnings of $10.69 per share, indicating a change of +8.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $44.71 points to a change of +14.3% from the prior year. Over the last 30 days, this estimate has changed +0.1%.

For the next fiscal year, the consensus earnings estimate of $49.99 indicates a change of +11.8% from what McKesson is expected to report a year ago. Over the past month, the estimate has changed +0.3%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for McKesson.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For McKesson, the consensus sales estimate for the current quarter of $110.11 billion indicates a year-over-year change of +6.8%. For the current and next fiscal years, $429.01 billion and $459.17 billion estimates indicate +6.3% and +7% changes, respectively.

Last Reported Results and Surprise HistoryMcKesson reported revenues of $105.38 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $9.93 for the same period compares with $8.26 a year ago.

Compared to the Zacks Consensus Estimate of $104.39 billion, the reported revenues represent a surprise of +0.95%. The EPS surprise was +5.19%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

McKesson is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about McKesson. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

IFP Advisors Inc lifted its position in McKesson Corporation (NYSE: MCK) by 10.7% in the undefined quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 7,514 shares of the company's stock after purchasing an additional 728 shares during the period. IFP

Counterpoint Mutual Funds LLC boosted its stake in shares of McKesson Corporation (NYSE:MCK – Free Report) by 18.9% in the third quarter, according to its most recent disclosure with the Securities & Exchange Commission. The firm owned 11,235 shares of the company’s stock after purchasing an additional 1,788 shares during the quarter. McKesson comprises 0.8% of Counterpoint Mutual Funds LLC’s portfolio, making the stock its 24th largest holding. Counterpoint Mutual Funds LLC’s holdings in McKesson were worth $9,593,000 as of its most recent filing with the Securities & Exchange Commission.

Other institutional investors and hedge funds have also modified their holdings of the company. BlackRock Inc. acquired a new position in McKesson in the 2nd quarter valued at $8,156,743,000. Bank of America Corp DE lifted its position in McKesson by 2.4% during the 1st quarter. Bank of America Corp DE now owns 1,538,726 shares of the company’s stock worth $1,331,552,000 after acquiring an additional 35,916 shares during the last quarter. Swedbank AB boosted its holdings in McKesson by 13.5% during the first quarter. Swedbank AB now owns 1,005,610 shares of the company’s stock valued at $870,215,000 after acquiring an additional 119,327 shares during the period. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its stake in McKesson by 3.3% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 922,573 shares of the company’s stock valued at $697,096,000 after purchasing an additional 29,747 shares during the period. Finally, Legal & General Group Plc acquired a new stake in shares of McKesson in the second quarter worth $656,566,000. 85.07% of the stock is currently owned by institutional investors and hedge funds.

McKesson Stock Performance Shares of NYSE:MCK opened at $1,005.39 on Friday. The business has a fifty day moving average of $897.66 and a 200-day moving average of $837.50. McKesson Corporation has a twelve month low of $723.68 and a twelve month high of $1,014.99. The firm has a market cap of $117.22 billion, a PE ratio of 26.90, a price-to-earnings-growth ratio of 2.00 and a beta of 0.30.

McKesson (NYSE:MCK – Get Free Report) last released its earnings results on Wednesday, August 5th. The company reported $9.93 EPS for the quarter, beating the consensus estimate of $9.56 by $0.37. McKesson had a negative return on equity of 253.21% and a net margin of 1.12%. The company had revenue of $105.38 billion during the quarter, compared to analysts’ expectations of $103.88 billion. During the same period last year, the firm earned $8.26 EPS. The business’s revenue for the quarter was up 7.7% on a year-over-year basis. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. On average, analysts anticipate that McKesson Corporation will post 44.71 EPS for the current fiscal year. McKesson Increases Dividend The company also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st were issued a $0.94 dividend. This represents a $3.76 annualized dividend and a yield of 0.4%. This is a boost from McKesson’s previous quarterly dividend of $0.82. The ex-dividend date was Tuesday, September 1st. McKesson’s dividend payout ratio (DPR) is 10.06%.

Insiders Place Their Bets In other McKesson news, Director Bradley Lerman sold 301 shares of McKesson stock in a transaction dated Monday, August 10th. The stock was sold at an average price of $892.33, for a total transaction of $268,591.33. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link. Also, CAO B Jr sold 111 shares of McKesson stock in a transaction dated Tuesday, September 8th. The shares were sold at an average price of $891.45, for a total value of $98,950.95. Following the transaction, the chief accounting officer owned 521 shares in the company, valued at $464,445.45. This trade represents a 17.56% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.06% of the company’s stock.

Wall Street Analyst Weigh In A number of research firms recently weighed in on MCK. Royal Bank Of Canada reissued a “sector perform” rating and set a $845.00 target price on shares of McKesson in a research report on Monday, September 14th. Leerink Partners boosted their price target on shares of McKesson from $1,030.00 to $1,070.00 and gave the company an “outperform” rating in a report on Wednesday, October 7th. Morgan Stanley set a $977.00 price objective on shares of McKesson in a research note on Tuesday, October 6th. Mizuho raised their price objective on shares of McKesson from $885.00 to $905.00 in a report on Thursday, August 6th. Finally, Weiss Ratings upgraded shares of McKesson from a “buy (b-)” rating to a “buy (b)” rating in a research report on Friday, September 4th. Fifteen analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average target price of $990.35.

Read Our Latest Research Report on MCK

McKesson Company Profile (Free Report)

McKesson Corporation is a healthcare services and information technology company that distributes pharmaceuticals and medical products to pharmacies, hospitals, health systems, physicians and other healthcare providers. The company also provides technology, data and business solutions designed to support prescription management, pharmacy operations and patient care.

McKesson’s principal activities include pharmaceutical distribution, medical-surgical supply distribution, specialty pharmaceutical services and oncology care support.

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Sax Wealth Advisors LLC purchased a new position in McKesson Corporation (NYSE:MCK – Free Report) during the 3rd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The fund purchased 691 shares of the company’s stock, valued at approximately $590,000.

A number of other institutional investors and hedge funds also recently modified their holdings of MCK. Terra Nova Asset Management LLC boosted its position in shares of McKesson by 31.6% in the third quarter. Terra Nova Asset Management LLC now owns 2,995 shares of the company’s stock worth $2,557,000 after buying an additional 720 shares during the period. NorthCrest Asset Manangement LLC raised its position in McKesson by 11.7% during the third quarter. NorthCrest Asset Manangement LLC now owns 727 shares of the company’s stock valued at $676,000 after buying an additional 76 shares during the period. HF Advisory Group LLC raised its position in McKesson by 4.0% during the third quarter. HF Advisory Group LLC now owns 1,577 shares of the company’s stock valued at $1,346,000 after buying an additional 61 shares during the period. Tilia Fiduciary Partners Inc. raised its position in McKesson by 0.6% during the third quarter. Tilia Fiduciary Partners Inc. now owns 5,344 shares of the company’s stock valued at $4,563,000 after buying an additional 30 shares during the period. Finally, Jacobs & Co. CA acquired a new position in McKesson during the third quarter valued at $213,000. Institutional investors and hedge funds own 85.07% of the company’s stock.

McKesson Trading Up 1.6% Shares of NYSE:MCK opened at $977.31 on Thursday. The stock has a market capitalization of $113.94 billion, a PE ratio of 26.15, a P/E/G ratio of 2.02 and a beta of 0.30. McKesson Corporation has a 1 year low of $723.68 and a 1 year high of $999.00. The firm has a fifty day moving average price of $892.49 and a 200 day moving average price of $835.35.

McKesson (NYSE:MCK – Get Free Report) last announced its quarterly earnings results on Wednesday, August 5th. The company reported $9.93 EPS for the quarter, beating the consensus estimate of $9.56 by $0.37. McKesson had a negative return on equity of 253.21% and a net margin of 1.12%. The company had revenue of $105.38 billion for the quarter, compared to the consensus estimate of $103.88 billion. During the same quarter last year, the company posted $8.26 earnings per share. The company’s revenue for the quarter was up 7.7% compared to the same quarter last year. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. On average, sell-side analysts forecast that McKesson Corporation will post 44.73 earnings per share for the current fiscal year. McKesson Increases Dividend The business also recently disclosed a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Tuesday, September 1st were issued a dividend of $0.94 per share. This represents a $3.76 annualized dividend and a dividend yield of 0.4%. The ex-dividend date was Tuesday, September 1st. This is a positive change from McKesson’s previous quarterly dividend of $0.82. McKesson’s payout ratio is presently 10.06%.

Insider Transactions at McKesson In related news, CAO B Jr sold 111 shares of the business’s stock in a transaction dated Tuesday, September 8th. The stock was sold at an average price of $891.45, for a total transaction of $98,950.95. Following the transaction, the chief accounting officer directly owned 521 shares in the company, valued at $464,445.45. The trade was a 17.56% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bradley Lerman sold 301 shares of the business’s stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $892.33, for a total value of $268,591.33. The disclosure for this sale is available in the SEC filing. 0.06% of the stock is currently owned by corporate insiders.

Wall Street Analyst Weigh In A number of brokerages have commented on MCK. Royal Bank Of Canada restated a “sector perform” rating and set a $845.00 price objective on shares of McKesson in a research report on Monday, September 14th. Robert W. Baird set a $1,015.00 target price on McKesson in a report on Thursday, August 6th. UBS Group upped their target price on McKesson from $1,050.00 to $1,080.00 and gave the company a “buy” rating in a report on Thursday, August 6th. TD Cowen increased their price target on shares of McKesson from $989.00 to $1,006.00 and gave the stock a “buy” rating in a research report on Thursday, August 6th. Finally, Citigroup raised their price target on shares of McKesson from $945.00 to $1,000.00 and gave the stock a “buy” rating in a report on Friday, July 24th. Fifteen equities research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus target price of $983.29.

View Our Latest Analysis on McKesson

McKesson Company Profile (Free Report)

McKesson Corporation (NYSE:MCK) is a healthcare services and information technology company that distributes pharmaceuticals, specialty drugs, medical supplies and other healthcare products. The company serves pharmacies, hospitals, health systems, physician practices, biopharma manufacturers and other healthcare providers, helping move products from manufacturers to patients and care settings.

McKesson’s principal operations include pharmaceutical distribution, medical-surgical supply distribution and technology-enabled services for pharmacies and providers.

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McKesson (MCK - Free Report) ended the recent trading session at $976.57, demonstrating a +1.53% change from the preceding day's closing price. The stock outpaced the S&P 500's daily loss of 1.11%. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq depreciated by 1.88%.

Coming into today, shares of the prescription drug distributor had gained 6.93% in the past month. In that same time, the Medical sector lost 0.4%, while the S&P 500 gained 2.06%.

The upcoming earnings release of McKesson will be of great interest to investors. The company's earnings report is expected on November 4, 2026. In that report, analysts expect McKesson to post earnings of $10.72 per share. This would mark year-over-year growth of 8.72%. At the same time, our most recent consensus estimate is projecting a revenue of $110.11 billion, reflecting a 6.75% rise from the equivalent quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $44.73 per share and a revenue of $429.01 billion, indicating changes of +14.37% and +6.34%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for McKesson. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.18% higher. McKesson is currently a Zacks Rank #2 (Buy).

From a valuation perspective, McKesson is currently exchanging hands at a Forward P/E ratio of 21.5. This valuation marks a premium compared to its industry average Forward P/E of 17.49.

We can also see that MCK currently has a PEG ratio of 2.02. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MCK's industry had an average PEG ratio of 2.02 as of yesterday's close.

The Medical - Dental Supplies industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 73, positioning it in the top 30% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MCK in the coming trading sessions, be sure to utilize Zacks.com.

Terra Nova Asset Management LLC increased its stake in shares of McKesson Corporation (NYSE:MCK – Free Report) by 31.6% in the 3rd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 2,995 shares of the company’s stock after buying an additional 720 shares during the quarter. McKesson accounts for about 1.8% of Terra Nova Asset Management LLC’s investment portfolio, making the stock its 20th largest position. Terra Nova Asset Management LLC’s holdings in McKesson were worth $2,557,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other hedge funds and other institutional investors have also modified their holdings of MCK. BlackRock Inc. bought a new stake in McKesson in the second quarter valued at $8,156,743,000. Bank of America Corp DE lifted its holdings in shares of McKesson by 2.4% during the first quarter. Bank of America Corp DE now owns 1,538,726 shares of the company’s stock valued at $1,331,552,000 after acquiring an additional 35,916 shares during the period. Swedbank AB lifted its holdings in shares of McKesson by 13.5% during the first quarter. Swedbank AB now owns 1,005,610 shares of the company’s stock valued at $870,215,000 after acquiring an additional 119,327 shares during the period. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its stake in shares of McKesson by 3.3% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 922,573 shares of the company’s stock valued at $697,096,000 after purchasing an additional 29,747 shares in the last quarter. Finally, Legal & General Group Plc acquired a new stake in shares of McKesson in the 2nd quarter valued at $656,566,000. Institutional investors own 85.07% of the company’s stock.

Insider Transactions at McKesson In other news, CAO Napoleon B. Rutledge, Jr. sold 111 shares of the stock in a transaction that occurred on Tuesday, September 8th. The shares were sold at an average price of $891.45, for a total transaction of $98,950.95. Following the sale, the chief accounting officer directly owned 521 shares of the company’s stock, valued at $464,445.45. This represents a 17.56% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bradley E. Lerman sold 301 shares of the firm’s stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $892.33, for a total transaction of $268,591.33. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 0.06% of the company’s stock.

McKesson Stock Performance Shares of NYSE:MCK opened at $954.65 on Tuesday. McKesson Corporation has a twelve month low of $723.68 and a twelve month high of $999.00. The firm has a market cap of $111.30 billion, a PE ratio of 25.55, a price-to-earnings-growth ratio of 1.97 and a beta of 0.30. The business has a fifty day moving average of $887.79 and a 200-day moving average of $833.96. McKesson (NYSE:MCK – Get Free Report) last released its quarterly earnings results on Wednesday, August 5th. The company reported $9.93 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $9.56 by $0.37. The business had revenue of $105.38 billion during the quarter, compared to analysts’ expectations of $103.88 billion. McKesson had a negative return on equity of 253.21% and a net margin of 1.12%. The firm’s revenue for the quarter was up 7.7% compared to the same quarter last year. During the same period in the previous year, the business posted $8.26 earnings per share. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. On average, analysts anticipate that McKesson Corporation will post 44.73 EPS for the current fiscal year.

McKesson Increases Dividend The business also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st were paid a $0.94 dividend. This is a boost from McKesson’s previous quarterly dividend of $0.82. This represents a $3.76 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date of this dividend was Tuesday, September 1st. McKesson’s payout ratio is presently 10.06%.

Analyst Ratings Changes Several equities research analysts have recently weighed in on the stock. Evercore reaffirmed an “outperform” rating and issued a $950.00 target price (down from $1,000.00) on shares of McKesson in a report on Thursday, August 6th. Weiss Ratings raised shares of McKesson from a “buy (b-)” rating to a “buy (b)” rating in a report on Friday, September 4th. UBS Group boosted their price target on shares of McKesson from $1,050.00 to $1,080.00 and gave the company a “buy” rating in a research report on Thursday, August 6th. Mizuho upped their price objective on shares of McKesson from $885.00 to $905.00 in a research note on Thursday, August 6th. Finally, Barclays upped their price objective on shares of McKesson from $925.00 to $1,000.00 and gave the stock an “overweight” rating in a research note on Wednesday, August 19th. Fifteen equities research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $983.29.

Read Our Latest Research Report on MCK

McKesson Profile (Free Report)

McKesson Corporation (NYSE:MCK) is a healthcare services and information technology company that distributes pharmaceuticals, specialty drugs, medical supplies and other healthcare products. The company serves pharmacies, hospitals, health systems, physician practices, biopharma manufacturers and other healthcare providers, helping move products from manufacturers to patients and care settings.

McKesson’s principal operations include pharmaceutical distribution, medical-surgical supply distribution and technology-enabled services for pharmacies and providers.

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This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: McKesson (MCK - Free Report) McKesson Corporation, headquartered in Irving, TX, is one of the largest global healthcare companies and the leading pharmaceutical distributor in North America. The company operates across four business segments: North American Pharmaceutical, which distributes branded, generic, and specialty drugs; Prescription Technology Solutions, which provides patient access, affordability, and third-party logistics services for biopharma manufacturers and payors; Medical-Surgical Solutions, supplying alternate-site providers such as physician offices and home health; and Oncology & Multispecialty, primarily focused on provider solutions. Specialty pharmaceuticals, oncology services, and GLP-1 medications for diabetes and obesity are key growth engines. In FY25, GLP-1 revenues alone reached nearly $41 billion.

MCK is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Medical stock. MCK has a Momentum Style Score of B, and shares are up 5.6% over the past four weeks.

For fiscal 2027, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.18 to $44.73 per share. MCK boasts an average earnings surprise of +4.3%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, MCK should be on investors' short list.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Let's take a look at what these Wall Street heavyweights have to say about McKesson (MCK - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

McKesson currently has an average brokerage recommendation (ABR) of 1.50, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 16 brokerage firms. An ABR of 1.50 approximates between Strong Buy and Buy.

Of the 16 recommendations that derive the current ABR, 12 are Strong Buy, representing 75% of all recommendations.

Brokerage Recommendation Trends for MCK

Check price target & stock forecast for McKesson here>>>

While the ABR calls for buying McKesson, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in MCK?Looking at the earnings estimate revisions for McKesson, the Zacks Consensus Estimate for the current year has increased 0.2% over the past month to $44.73.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for McKesson. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for McKesson may serve as a useful guide for investors.

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.86% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: McKesson (MCK - Free Report) McKesson Corporation, headquartered in Irving, TX, is one of the largest global healthcare companies and the leading pharmaceutical distributor in North America. The company operates across four business segments: North American Pharmaceutical, which distributes branded, generic, and specialty drugs; Prescription Technology Solutions, which provides patient access, affordability, and third-party logistics services for biopharma manufacturers and payors; Medical-Surgical Solutions, supplying alternate-site providers such as physician offices and home health; and Oncology & Multispecialty, primarily focused on provider solutions. Specialty pharmaceuticals, oncology services, and GLP-1 medications for diabetes and obesity are key growth engines. In FY25, GLP-1 revenues alone reached nearly $41 billion.

MCK is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. MCK has a Growth Style Score of A, forecasting year-over-year earnings growth of 14.4% for the current fiscal year.

For fiscal 2027, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.18 to $44.73 per share. MCK boasts an average earnings surprise of +4.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, MCK should be on investors' short list.

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.

That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.

However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.

Our proprietary system currently recommends McKesson (MCK - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.

Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Here are three of the most important factors that make the stock of this prescription drug distributor a great growth pick right now.

Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for McKesson is 13.2%, investors should actually focus on the projected growth. The company's EPS is expected to grow 14.4% this year, crushing the industry average, which calls for EPS growth of 7.7%.

Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.

Right now, McKesson has an S/TA ratio of 4.85, which means that the company gets $4.85 in sales for each dollar in assets. Comparing this to the industry average of 0.77, it can be said that the company is more efficient.

In addition to efficiency in generating sales, sales growth plays an important role. And McKesson looks attractive from a sales growth perspective as well. The company's sales are expected to grow 6.3% this year versus the industry average of 3.5%.

Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

There have been upward revisions in current-year earnings estimates for McKesson. The Zacks Consensus Estimate for the current year has surged 0.2% over the past month.

Bottom LineWhile the overall earnings estimate revisions have made McKesson a Zacks Rank #2 stock, it has earned itself a Growth Score of A based on a number of factors, including the ones discussed above.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination positions McKesson well for outperformance, so growth investors may want to bet on it.

What happened McKesson Corporation (NYSE: MCK) said on October 6, 2026, it signed a definitive agreement with Clayton, Dubilier Rice, LLC and Option Care Health, Inc. CD R will hold about 51% of Option Care Health and McKesson will invest about $1.4 billion for a minority interest of about 49%. The deal values Option Care Health at about $5.8 billion and assigns a premium of about 37% to its October 5, 2026 closing share price.

Option Care Health is an independent provider of home and alternate site infusion services. It will remain a separate company led by its own management team. The agreement also sets a framework for McKesson's future acquisition of CD R's interest, subject to specified conditions and regulatory approvals. After closing, McKesson plans to use equity method accounting and record its share of Option Care Health's net income or loss in Other Income, net.

Key numbers Metric Latest Change Source Price per share $32.05 per share Joint news release Enterprise value approximately $5.8 billion Joint news release McKesson investment approximately $1.4 billion Joint news release CD R majority interest approximately 51% Joint news release McKesson minority interest approximately 49% Joint news release Premium to October 5, 2026 close approximately 37% Joint news release Read more: McKesson (MCK) stock analysis and investment case Why it matters OptimistFi's case is that McKesson's scale in North American drug distribution and specialty oncology services will keep converting healthcare volume into rising profit and cash despite very thin wholesale margins. This agreement strengthens that view by extending McKesson into home and alternate site infusion services. The filing says the company wants to improve access and advance care in lower-cost community settings, at or closer to home.

OptimistFi calculates that McKesson's about $1.4 billion commitment equals about 24.1% of the transaction's approximately $5.8 billion enterprise value. That is a large check for a minority interest. The 37% premium may help win support, but the deal remains subject to approvals. McKesson says it may not achieve the expected benefits, and the transaction may be delayed or may not be completed.

Browse: stock research on every company OptimistFi covers

What's next The next dated milestone is Option Care Health's third quarter 2026 results on November 4, 2026. The transaction is expected to close in the first half of calendar year 2027, subject to Option Care Health stockholder approval and required regulatory approvals. If those approvals land on time, Option Care Health's common stock will no longer be publicly listed on Nasdaq. If they do not, the deal may be delayed or may not be completed.

More from OptimistFi MCK stock: the McKesson thesis, its status and the next test to watch United States Brent Oil Fund, LP (NYSE Arca: BNO) Tracks a Supply Gap Alpha Teknova, Inc. (NASDAQ: TKNO) Adds Regulatory Support for PluriFreeze Meta Platforms, Inc. (NASDAQ: META) Has a Conditional $18 Billion Bill Stock research on every company OptimistFi covers Latest stock research and investment-case updates OptimistFi: evidence-first equity research Sources Joint news release — McKesson, CD R and Option Care Health announced the definitive agreement and deal terms. McKesson Form 8-K — McKesson filed the Regulation FD disclosure on October 6, 2026. Read the full OptimistFi thesis on McKesson Corporation: https://optimistfi.com/stocks/MCK

See what would break the McKesson Corporation thesis and track it live on the OptimistFi Thesis-Break Engine.

Browse every company OptimistFi covers at optimistfi.com/stocks, or read the latest evidence-first research.

The full McKesson Corporation investment case, its status and the next test to watch live on the McKesson Corporation thesis page.

Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.

Park National Corp OH lowered its stake in shares of McKesson Corporation (NYSE:MCK – Free Report) by 8.2% in the third quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 13,304 shares of the company’s stock after selling 1,183 shares during the quarter. Park National Corp OH’s holdings in McKesson were worth $11,359,000 at the end of the most recent quarter.

Other hedge funds have also recently bought and sold shares of the company. BlackRock Inc. bought a new position in McKesson during the 2nd quarter valued at $8,156,743,000. State Street Corp lifted its position in shares of McKesson by 0.5% during the fourth quarter. State Street Corp now owns 5,780,179 shares of the company’s stock worth $4,746,118,000 after purchasing an additional 29,660 shares during the last quarter. Franklin Resources Inc. increased its holdings in McKesson by 5.4% in the fourth quarter. Franklin Resources Inc. now owns 2,825,954 shares of the company’s stock valued at $2,318,102,000 after buying an additional 144,633 shares during the last quarter. Bank of America Corp DE increased its holdings in McKesson by 2.4% in the first quarter. Bank of America Corp DE now owns 1,538,726 shares of the company’s stock valued at $1,331,552,000 after buying an additional 35,916 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership raised its stake in McKesson by 6.8% during the fourth quarter. Arrowstreet Capital Limited Partnership now owns 1,376,276 shares of the company’s stock valued at $1,128,945,000 after buying an additional 87,513 shares in the last quarter. Hedge funds and other institutional investors own 85.07% of the company’s stock.

Wall Street Analyst Weigh In A number of equities research analysts have recently weighed in on the company. Robert W. Baird set a $1,015.00 price target on McKesson in a report on Thursday, August 6th. Citigroup boosted their target price on shares of McKesson from $945.00 to $1,000.00 and gave the company a “buy” rating in a research note on Friday, July 24th. Barclays increased their target price on shares of McKesson from $925.00 to $1,000.00 and gave the stock an “overweight” rating in a report on Wednesday, August 19th. Royal Bank Of Canada reaffirmed a “sector perform” rating and issued a $845.00 price target on shares of McKesson in a report on Monday, September 14th. Finally, Weiss Ratings raised shares of McKesson from a “buy (b-)” rating to a “buy (b)” rating in a research report on Friday, September 4th. Fourteen analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $973.44.

Read Our Latest Stock Analysis on McKesson McKesson Trading Up 1.8% NYSE:MCK traded up $16.05 during mid-day trading on Monday, hitting $918.33. The stock had a trading volume of 154,775 shares, compared to its average volume of 939,217. The company has a 50 day simple moving average of $880.02 and a 200-day simple moving average of $832.83. The stock has a market capitalization of $107.07 billion, a price-to-earnings ratio of 24.58, a P/E/G ratio of 1.79 and a beta of 0.30. McKesson Corporation has a 52 week low of $723.68 and a 52 week high of $999.00.

McKesson (NYSE:MCK – Get Free Report) last released its quarterly earnings results on Wednesday, August 5th. The company reported $9.93 earnings per share for the quarter, beating analysts’ consensus estimates of $9.56 by $0.37. McKesson had a negative return on equity of 253.21% and a net margin of 1.12%.The company had revenue of $105.38 billion for the quarter, compared to analysts’ expectations of $103.88 billion. During the same quarter in the previous year, the company posted $8.26 earnings per share. The business’s revenue for the quarter was up 7.7% compared to the same quarter last year. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. As a group, equities research analysts anticipate that McKesson Corporation will post 44.71 earnings per share for the current year.

McKesson Increases Dividend The business also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st were given a dividend of $0.94 per share. This is a positive change from McKesson’s previous quarterly dividend of $0.82. The ex-dividend date was Tuesday, September 1st. This represents a $3.76 dividend on an annualized basis and a dividend yield of 0.4%. McKesson’s payout ratio is presently 10.06%.

Insiders Place Their Bets In other news, CAO B Jr sold 111 shares of the stock in a transaction that occurred on Tuesday, September 8th. The shares were sold at an average price of $891.45, for a total value of $98,950.95. Following the completion of the transaction, the chief accounting officer directly owned 521 shares in the company, valued at $464,445.45. This trade represents a 17.56% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Brian Tyler sold 8,463 shares of the stock in a transaction on Tuesday, July 7th. The shares were sold at an average price of $793.56, for a total value of $6,715,898.28. Following the transaction, the chief executive officer directly owned 5,919 shares of the company’s stock, valued at approximately $4,697,081.64. The trade was a 58.84% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 8,875 shares of company stock worth $7,083,441. 0.06% of the stock is owned by corporate insiders.

About McKesson (Free Report)

McKesson Corporation (NYSE:MCK) is a healthcare services and information technology company that distributes pharmaceuticals, specialty drugs, medical supplies and other healthcare products. The company serves pharmacies, hospitals, health systems, physician practices, biopharma manufacturers and other healthcare providers, helping move products from manufacturers to patients and care settings.

McKesson’s principal operations include pharmaceutical distribution, medical-surgical supply distribution and technology-enabled services for pharmacies and providers.

Read More Five stocks we like better than McKesson A Manufacturing Surprise Could Be a Big Win for These 2 Companies What a $1 Billion Chip Deal Says About Amazon’s AI Ambitions 3 Stocks Benefiting From AI Demand Just Announced Major Buybacks Insiders Are Selling These 3 Stocks, Should You? Want to see what other hedge funds are holding MCK? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for McKesson Corporation (NYSE:MCK – Free Report).

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As of 11:31 a.m. ET, the Nasdaq Composite (^IXIC +0.26%) was down 0.22% to 26,801, the S&P 500 (^GSPC +0.29%) was trading lower by 0.26% to 7,632, and the Dow Jones Industrial Average (^DJI +0.00%) dropped 0.56% to 50,623 as surging bond yields pressure blue chip components.

Gold was up 0.17% to $4,193.70, while the 10-Year Treasury yield rose 0.03% to 5.29% during a session where industrials are leading the market. Basic materials stocks are the primary laggard, with consumer defensive names also showing resilience.

Today's biggest movesAccenture (ACN +17.35%) shares jumped after the company reported quarterly results that beat expectations alongside an upbeat fiscal 2027 outlook, while McKesson (MCK +4.03%) is rallying despite broader volatility. On the downside, Corteva (CTVA -84.32%) is among the session's notable decliners and General Mills (GIS -1.51%) hit a 52-week low as rising interest rates weigh on the consumer sector.

What this means for investorsIn a sign that investor expectations are higher than ever for tech firms, Micron Technology's (MU +1.46%) stock sank even after the company reported sales nearly quadrupled year over year and beat the analyst earnings consensus. It also issued strong guidance, but much of that news was already seemingly priced in.

The market was also under pressure as Treasury yields reached their highest level in over 20 years. Those rising rates will hit growth companies harder as they continue to borrow to invest in artificial intelligence (AI) equipment.

High Treasury yields also compete with dividend-paying stocks, helping to drive that segment of the market lower. The market may also be looking ahead to Friday's monthly jobs report, which could help determine the future direction of interest rates.

Howard Smith has positions in Alphabet. The Motley Fool has positions in and recommends Accenture Plc, Alphabet, Chevron, and Micron Technology. The Motley Fool recommends McKesson and recommends the following options: long January 2028 $260 calls on Accenture Plc and short January 2028 $280 calls on Accenture Plc. The Motley Fool has a disclosure policy.

The Zacks Medical – Dental Supplies industry is benefiting from several structural healthcare shifts. Demand continues to benefit from stable healthcare utilization, continued expansion of specialty medicines, increasing adoption of biologics and GLP-1 therapies, and migration toward outpatient, home-based and community care.

Distributors and manufacturers are increasingly monetizing technology through AI, automation, digital workflows and data-enabled services, improving productivity and strengthening customer relationships. The supply side is also becoming more sophisticated, with investments in automated distribution, manufacturing efficiency and resilient infrastructure.

However, the outlook is not uniformly positive. Tariffs, commodity and freight inflation, policy-driven pharmaceutical price changes, uneven regional demand and softer capital-equipment spending remain constraints.

Overall, the structural demand drivers are currently broader and more durable than the principal cost and macroeconomic headwinds affecting the industry. Companies with diversified business models, technology leadership, specialty exposure and disciplined capital allocation appear well positioned to capitalize on these favorable industry tailwinds through the remainder of 2026.

According to a Mordor Intelligence report, the global medical supplies industry is expected to witness a CAGR of 10%, reaching $318.77 billion by 2031 from an estimated $198.17 billion in 2026. Industry participants, such as McKesson (MCK - Free Report) , Cardinal Health (CAH - Free Report) , Becton, Dickinson and Company (BDX - Free Report) , Merit Medical Systems (MMSI - Free Report) and ProDex (PDEX - Free Report) , are likely to ride on the favorable macro trends amid lingering tariff risks.

Industry Description The Medical–Dental Supplies industry comprises companies that manufacture, distribute and support medical and dental products. The products include consumables, drug-delivery systems, clinical equipment, dental instruments, restorative materials and technology-enabled solutions. Demand for medical supply products is increasingly driven by rising adoption of specialty therapies, biologics, GLP-1 treatments, outpatient care, automation and digital healthcare workflows. Meanwhile, recurring consumables can support revenue resilience. Recent market trends highlight specialty-care utilization, supply-chain efficiency and technology adoption as important industry factors.

Dental supplies form a specialty within the broader market, covering preventive, restorative, surgical and practice-management products.

Major Trends Shaping the Future of the Medical Dental Supplies Industry Specialty Care, Biologics and GLP-1s Strengthen Demand: Specialty healthcare is emerging as a common growth engine across the industry. Rising specialty-drug volumes are supporting distribution, while biologics, oncology, advanced therapies and GLP-1s are expanding demand for specialized delivery, containment and support infrastructure. The trend also extends into theranostics and other complex therapies, increasing the value of technically differentiated products and services.

AI, Automation and Digitalization Are Reshaping Healthcare Supply Chains: Technology is moving beyond incremental efficiency gains and becoming a growth enabler. AI-supported planning, automated distribution, digital clinical workflows and connected platforms are helping companies improve productivity while lowering adoption barriers for healthcare customers. These investments can create recurring revenue opportunities, improve supply-chain resilience and enable providers to manage growing workloads more efficiently.

These technologies help providers improve efficiency, reduce administrative burdens and expand patient access while allowing distributors to enhance operational resilience and margins. As healthcare systems prioritize productivity improvements, technology-enabled service offerings are becoming an increasingly important source of competitive advantage and long-term growth.

Increasing Burden of Oral Diseases and an Aging Population: The U.S. dental equipment market is structurally supported by aging demography and rising disease prevalence. Older cohorts account for a disproportionate share of restorative and surgical procedures, reflecting a higher incidence of caries, periodontal disease and tooth loss. With the 65+ population expanding, demand visibility remains strong, reinforcing procedure volumes and equipment utilization across practices.

Growing Emphasis on Preventive and Early Dental Care: Greater emphasis on oral-health prevention is supporting demand for products and procedures aimed at preventing or managing dental disease at an earlier stage. Fluoride treatments and dental sealants are established preventive interventions, while regular professional cleanings and home-care products remain important components of ongoing oral-health management.

CDC data show that fewer than half of U.S. children and adolescents have dental sealants, suggesting meaningful room for greater adoption. For dental-supply manufacturers, broader adoption of preventive treatments can expand demand for recurring consumables, such as fluoride products, sealants, prophylaxis materials and oral-care products. This trend is supported by the persistent prevalence of cavities and periodontal disease, reinforcing the importance of preventive care across age groups.

Minimally Invasive and Cosmetic Dentistry Trends: Patient preference is increasingly skewed toward minimally invasive and aesthetic procedures, including whitening and veneers. This trend is expanding demand for specialized materials and precision equipment, while also increasing procedure frequency and average spend per patient.

Expansion of Dental Clinics and Group Practices: The ongoing expansion of dental clinics, DSOs and hospital-based practices is structurally increasing equipment demand. Higher patient throughput, standardized treatment protocols and procurement efficiencies are driving consistent product utilization across growing care networks.

Regional Market Growth Drivers: Emerging markets, particularly in Asia-Pacific, are exhibiting above-average growth due to rising healthcare expenditure, improving access and supportive policy frameworks. Dental tourism and expanding middle-class demand are further accelerating equipment adoption in these regions.

Policy Changes and Ongoing Cost Inflation: Despite healthy demand, companies continue navigating an increasingly complex operating environment. Tariffs, healthcare policy changes, pharmaceutical pricing reforms under the Inflation Reduction Act, higher freight costs and inflationary pressures remain important headwinds.

Several companies also cited softer demand in select product categories, such as respiratory diagnostics following a mild flu season, while competitive pricing in certain technology markets continued to weigh on margins. Although management remains confident in mitigating these pressures through pricing actions, productivity initiatives and supply-chain improvements, these headwinds are likely to remain through the rest of 2026.

Zacks Industry Rank The Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector.

It carries a Zacks Industry Rank #107, which places it in the top 43% of 243 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Before we present a few dental supply stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Performance The industry has outperformed its sector but underperformed the S&P 500 composite in the past year.

Stocks in this industry collectively gained 12% compared with the Zacks Medical sector’s rise of 7.8%. The S&P 500 has surged 15.3% in the same time frame.

One-Year Price Performance

Image Source: Zacks Investment Research

Industry's Current Valuation On the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 17.05X compared with the S&P 500’s 19.71X and the sector’s 20.91X.

Over the past five years, the industry has traded as high as 20.98X and as low as 15.75X, with the median being 20.7X, as the charts show.

Price-to-Earnings Forward Twelve Months (F12M)

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Price-to-Earnings Forward Twelve Months (F12M)

Image Source: Zacks Investment Research

5 Key Stocks to Watch Right Now Pro-Dexhas entered the final quarter of 2026 with several growth drivers. Net sales in the fourth quarter of fiscal 2026 rose 17% year over year to $20.4 million, while gross profit more than doubled to $7.1 million, reflecting favorable product mix and contributions from Advanced Precision Machining (“APM”). The quarter also benefited from resumed production and shipments of a next-generation handpiece for its largest customer, supporting the company’s expanding orthopedic device franchise.

Pro-Dex’s pipeline provides additional support. The company recently highlighted long-term OEM relationships, proprietary adaptive torque-limiting technology and expanding robotic end-effector opportunities. PDEX also launched a new Pro-Dex-branded product during the fiscal fourth quarter. Customer concentration remains a risk, while the company cautions that the adoption of new products and its ability to manage growth could affect results.

The Zacks Consensus Estimate for fiscal 2027 revenues indicates an improvement of 6.7% from the year-ago reported figure, while the same for earnings implies a decline of 7.5%. PDEX sports a Zacks Rank #1 (Strong Buy) at present.You can see the complete list of today's Zacks #1 Rank stocks here.

Price and Consensus: PDEX

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Merit Medical Systems:MMSI has strong underlying momentum after delivering 9% organic constant-currency growth in the second quarter, its strongest quarterly organic performance in three years. Growth was broad-based, led by Vascular Intervention, Access, Cardiac Therapies and Endoscopy. OEM sales rose 15% and are expected to improve further in the rest of 2026.

The oncology portfolio also offers incremental growth potential, with OneMark and SCOUT MD expanding Merit Medical’s breast-care localization offering. Meanwhile, the Endoscopy business benefited from C2 CryoBalloon and Resilience.

Tariff uncertainty remains a margin risk, with the company incorporating a $16 million tariff impact into its 2026 EPS outlook. Third-quarter results, expected to be announced later this month, are likely to reflect softness due to seasonality, but management expects a strong fourth-quarter rebound.

MMSI expects adjusted EPS to be in the range of $4.25-$4.35 for 2026. The company expects total revenues to grow 8% year over year.

The Zacks Consensus Estimate for 2026 revenues indicates an improvement of 7.8% from the year-ago reported figure, while the same for earnings implies a rise of 12.3%. MMSI carries a Zacks Rank #2 (Buy) at present.

Price and Consensus: MMSI

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McKesson

McKesson’s late-2026 trajectory is supported by broad strength across its segments. North American Pharmaceutical benefits from higher prescription volumes, specialty growth and GLP-1 distribution. Oncology & Multispecialty remains a major growth engine, supported by provider expansion, specialty distribution, practice management and differentiated services across oncology and other community-based specialties.

Prescription Technology Solutions is benefiting from demand for access and affordability services, including prior authorization solutions. AI and automation are improving productivity. McKesson is also expanding distribution capacity through a new automated facility in Oklahoma. The main challenges are lower branded-drug pricing and brand-to-generic conversions, which weigh on reported pharmaceutical revenues. MedSurg also faces lower operating profit despite improving revenue trends.

MCK expects adjusted EPS to be in the range of $43.80-$44.60 for fiscal 2027. The company expects revenues from its North American Pharmaceutical segment to grow 4-8% year over year. Revenues from the Oncology and Multispecialty segment are estimated to grow 14.5-18.5% and those from the Prescription Technology segment are likely to increase 2.5-6.5%. Sales at the MedSurg segment are projected to grow 1-6%.

The Zacks Consensus Estimate for fiscal 2027 revenues indicates an improvement of 6.4% from the year-ago reported figure, while the same for earnings implies a rise of 14.1%. MCK has a Zacks Rank #3 (Hold) at present.

Price and Consensus: MCK

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Cardinal Health’s outlook for the rest of 2026 is underpinned by specialty pharmaceuticals and its higher-growth businesses. Management expects Specialty to continue expanding within Pharma, while brand and generic volume strength and growth in higher-margin specialty activities support segment profitability.

The Other portfolio — At-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics — provides additional growth exposure, with management expecting revenue growth to accelerate through fiscal 2027. Theranostics remains an important catalyst for Nuclear and Precision Health Solutions. In GMPD, Cardinal Health is focused on optimizing costs, strengthening supply-chain resilience and expanding its Cardinal Health brand.

IRA-related pricing changes remain a revenue headwind for Pharma, while rising fuel and commodity costs could offset expected tariff benefits. Management also cautioned that a prolonged Iran conflict could pressure GMPD profitability.

CAH expects adjusted EPS to be in the range of $12.40-$12.60 for fiscal 2027. The company expects revenues from its Pharmaceutical segment to grow 8-11% year over year. Revenues from the GMPD segment are estimated to grow 2-4% and those from the Other segment are likely to increase 11-13%.

The Zacks Consensus Estimate for fiscal 2027 revenues indicates an improvement of 4.6% from the year-ago reported figure, while the same for earnings implies a rise of 11.5%. CAH carries a Zacks Rank of 3 at present.

Price and Consensus: CAH

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Becton, Dickinson and Company, or popularly known as BD has entered late 2026 with growth increasingly concentrated in its higher-growth platforms. In the third quarter of fiscal 2026, biologic drug delivery, advanced patient monitoring, PureWick, advanced tissue regeneration, peripheral vascular disease and Rowa pharmacy automation delivered strong momentum. New products, including the Liverty TIPS Stent Graft, Elyra Thulium Fiber Laser and Acumen IQ Plus, are expanding BDX’s addressable markets.

The company’s approximately 100 novel and biosimilar GLP-1 agreements strengthen its biopharma pipeline. Operationally, BD Excellence delivered about 8% gross productivity and supported strong service levels, providing an additional margin lever. However, Alaris remains a defined drag because of difficult comparisons, while vaccines in China and other China-related dynamics continue to weigh on growth. Tariffs also reduced margins by approximately 110 basis points in the third quarter.

BDX expects adjusted EPS to be in the range of $12.62-$12.72 for fiscal 2026. The company expects total revenues to grow in low-single percentage points year over year.

The Zacks Consensus Estimate for fiscal 2026 revenues indicates a decline of 11.1% from the year-ago reported figure, while the same for earnings implies a deterioration of 12.6%. However, sales and EPS are estimated to improve 2.5% and 5.2%, respectively, in fiscal 2027. BDX carries a Zacks Rank of 3 at present.

Price and Consensus: BDX

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Key Takeaways McKesson raised fiscal 2027 adjusted EPS guidance to $44.20-$45.00 after first-quarter EPS rose 20%.Oncology & Multispecialty revenues surged 33% to $14.2 billion, while operating profit increased 41%.McKesson's GLP-1 distribution revenues reached $15 billion in Q1, up about 24% year over year. McKesson’s (MCK - Free Report) prospects are being driven by robust growth in specialty distribution, oncology services and biopharma solutions. Earnings are also improving on the back of ongoing operational efficiency and capital discipline despite persistent margin pressures and volatility across certain segments.

Shares of this Zacks Rank #3 (Hold) company have gained 4.4% so far this year compared with the industry's 2% rise. The S&P 500 has increased 12.7% in the said time frame.

MCK is one of the leading pharmaceutical distributors in North America, with a market capitalization of $88.46 billion. It forecasts 13.7% earnings growth over the next five years. The company’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 3.09%.

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Factors Favoring MCK StockBroad-Based Growth Is Strengthening McKesson’s Earnings: McKesson’s performance in the first quarter of fiscal 2027 demonstrated that earnings momentum is not dependent on a single business. Revenues increased 8% to $105.4 billion, while adjusted EPS rose 20% to $9.93. North American Pharmaceutical, Oncology & Multispecialty and Prescription Technology Solutions all delivered double-digit operating-profit growth.

Management said June was the strongest month of the quarter, suggesting positive momentum exiting the first quarter. The company subsequently raised fiscal 2027 adjusted EPS guidance to $44.20-$45.00, implying 15-17% growth at the midpoint. Growth across major segmentsgives McKesson multiple avenues to sustain earnings growth even if individual product categories experience volatility.

Oncology & Multispecialty Is Becoming a Major Growth Accelerator: Oncology & Multispecialty delivered exceptional first-quarter momentum, with revenues rising 33% to $14.2 billion and operating profit increasing 41%. Even excluding the Core Ventures acquisition, revenues grew approximately 24%, indicating that organic expansion remains substantial.

Management attributed the performance to higher specialty-distribution volumes, penetration of existing provider relationships and new-business wins. The U.S. Oncology Network now includes approximately 3,400 providers, while the broader specialty platform serves more than 14,000 providers. With stable patient utilization, physician recruitment, geographic expansion and additional services creating cross-selling opportunities, management expects 14.5-18.5% revenue growth for the segment in fiscal 2027.

GLP-1 Distribution Is Creating Significant Volume Tailwinds: McKesson’s exposure to GLP-1 therapies is boosting topline significantly. North American Pharmaceutical generated $15 billion of GLP-1 distribution revenues in the first quarter, more than 14% of total revenues. GLP-1 sales were up approximately 24% year over year and 13% sequentially. Management expects GLP-1 volumes to continue growing throughout fiscal 2027, although quarterly variability is likely.

Growth across both covered and other channels suggests that demand extends beyond any single reimbursement mechanism. Prescription Technology Solutions is also benefiting from GLP-1 demand through access and affordability services. This creates a complementary growth model in which McKesson can participate through both pharmaceutical distribution and technology-enabled patient access.

Factors That May Offset the Gains for MCKBranded Drug Price Declines and Generic Conversion Pressure Growth: North American Pharmaceutical revenues increased 5%, but growth was partially offset by lower branded pharmaceutical pricing following January 2026 WAC reductions and branded-to-generic conversions. McKesson emphasized that these pricing changes have a limited impact on operating profit because more than 95% of branded drugs are sold under fee-for-service arrangements, although the effect on reported revenues remains significant. Since pharmaceutical distribution revenues are recognized based on drug selling prices, further WAC reductions could suppress headline revenue growth even when prescription volumes remain healthy.

Medical-Surgical Solutions Faces Low Growth, Margin Pressure: Medical-Surgical Solutions improved its revenue trajectory in the fiscal first quarter, but the segment remains a drag on McKesson’s consolidated earnings profile. Revenues increased only 4% to $2.8 billion, while operating profit declined 20% to $195 million.

Management attributed the earnings decline to product mix and a one-time administrative expense, partially offset by extended-care contributions. The fiscal 2027 outlook calls for only 1-6% revenue growth and flat-to-4% operating-profit growth. The planned separation into Wellverse should sharpen strategic focus, but until the business achieves stronger profitability, its slower growth and margin volatility can dilute the contribution from McKesson’s faster-growing oncology and technology businesses.

Regulatory and Policy Changes Create Long-Term Uncertainty: McKesson continues to face uncertainty from evolving healthcare policies, particularly 340B reform and the IRA Part D framework. Management stressed that the current 340B proposal remains under review, making its eventual structure and timing difficult to assess.

The company also noted that IRA Part D changes are not scheduled to take effect until January 2028, with important variables — including maximum fair prices, reimbursement changes and potential biosimilar competition — still unresolved. McKesson believes its scale, technology and compliance capabilities should help it adapt, but policy changes could alter economics across manufacturers, providers, pharmacies and other stakeholders, creating uncertainty around future growth and segment profitability.

Estimate Trends for MCKMcKesson is witnessing a positive estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for its earnings per share has improved 3 cents to $44.64.

The Zacks Consensus Estimate for the company’s second-quarter fiscal 2027 revenues and earnings per share is pegged at $110.14 billion and $10.72, respectively. The estimate for revenues indicates a 6.8% improvement from the year-ago quarter’s reported number, while that for earnings implies an 8.7% gain.

Key PicksSome better-ranked stocks from the broader medical space are Veracyte (VCYT - Free Report) , Globus Medical (GMED - Free Report) and Intuitive Surgical (ISRG - Free Report) .

Veracyte, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted earnings per share (EPS) of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.8%.

Globus Medical, currently flaunting a Zacks Rank #1, reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%.

GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.

Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2026 adjusted EPS of $2.80, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.89 billion surpassed the Zacks Consensus Estimate by 3.1%.

Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.5%.

Key Takeaways CAH's fiscal fourth-quarter revenues rose 6%, while operating income jumped 30%.MCK raised full-year adjusted EPS guidance after first-quarter revenues rose 8% to $105 billion.CAH has stronger projected EPS growth, while MCK has faster projected sales growth. Cardinal Health (CAH - Free Report) and McKesson (MCK - Free Report) are direct competitors in U.S. pharmaceutical distribution, with both increasingly leveraging specialty pharmaceuticals, provider platforms and technology to expand beyond traditional distribution.

CAH’s core momentum is anchored by Pharmaceutical and Specialty Solutions, supported by at-Home Solutions, Nuclear and Precision Health and OptiFreight. MCK is leveraging its scaled distribution network, oncology and multispecialty platforms and biopharma services. Both are positioned for durable growth in 2026, but CAH entered the year with stronger earnings momentum and multiple growth levers.

CAH has gained 4.7% over the past six months compared with a 0.1% increase for MCK. Both companies have underperformed the Zacks Medical sector’s rise of 9.1% and the S&P 500’s return of 17.7% over the same period.

6-Month Price Performance

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Case for CAHCAH’s latest results show a shift toward a diversified, specialty-led model. In the fourth quarter of fiscal 2026, revenues rose 6% to $63.7 billion, gross profit increased 16% and operating income jumped 30%. Pharmaceutical and Specialty Solutions remained the anchor, with segment revenues up 6% and profit up 21%, driven by brand and specialty portfolios. The company is expanding MSO capabilities through Specialty Alliance and integrating Solaris to deepen physician relationships across specialty care.

Beyond distribution, CAH’s three Other businesses generated 7% revenue growth and 14% profit growth in the fiscal fourth quarter. Nuclear and Precision Health is benefiting from theranostics expansion, while at-Home Solutions and OptiFreight add exposure to chronic-care delivery and logistics. Cardinal Health is also investing in automation and supply-chain technology. CAH’s key risks include tariff and regulatory uncertainty, acquisition integration and execution of the GMPD improvement plan.

CAH’s Full-Year Sales & EPS Estimated Growth Rate

Image Source: Zacks Investment Research

Case for MCKMcKesson continues to build around scale and specialty healthcare services. In the first quarter of fiscal 2027, revenues increased 8% to $105 billion and adjusted EPS rose 20% to $9.93, prompting management to raise full-year adjusted EPS guidance to $44.20-$45.00. Its oncology and multispecialty platform serves more than 14,000 providers, while the U.S. Oncology Network reached approximately 3,400 providers. PRISM Vision expands retina and ophthalmology exposure, while InspiroGene adds advanced therapy capabilities.

Technology is a visible competitive lever. MCK highlighted enterprise AI training, automation in biopharma services and AI-enabled workflows. Ambient Scribe is currently used by more than 1,900 oncology providers, while MCK continues to embed AI into data and workflow tools. The company is also modernizing distribution through AI- and robotics-enabled facilities and AI-driven inventory planning. However, MCK continues to face challenges, including policy uncertainty, pharmaceutical pricing changes and the planned Medical-Surgical separation.

MCK’s Full-Year Sales & EPS Estimated Growth Rate

Image Source: Zacks Investment Research

Valuation — CAH vs MCKCAH’s P/E F12M earnings multiple of 17.2 is below the Zacks Medical sector’s 21 multiple but above its five-year median of 14.11. The multiple reflects some re-rating while remaining below sector valuation, providing a moderate valuation backdrop alongside stronger projected EPS growth.

MCK trades at 18.7 P/E F12M earnings multiple, also below the Zacks Medical sector’s multiple but above its five-year median of 16X. The smaller premium to historical valuation reflects established execution, although the stock offers less valuation differentiation than CAH.

5-Year P/E F12M: CAH vs MCK

Image Source: Zacks Investment Research

Sales and EPS EstimatesCAH’s first-quarter fiscal 2027 estimates call for sales of $66.96 billion, up 4.6%, and EPS of $2.92, up 14.5%. EPS estimates have remained stable over the past seven days. MCK’s second-quarter fiscal 2027 estimates point to $110.14 billion of sales, up 6.8%, and EPS of $10.72, up 8.7%. The EPS estimates have declined 3 cents in seven days. Thus, MCK has higher projected sales growth, but CAH has stronger projected EPS growth and a steadier estimate trend.

ConclusionBoth Cardinal Health and McKesson carry a Zacks Rank #3 (Hold) at present, while CAH appears favorable based on Zacks Style Scores. Both CAH and MCK have a Growth score of A, but CAH has higher expected EPS growth. The differentiation is clearer on value and momentum — CAH has a Value Score of A versus B for MCK, while its Momentum Score of A compares with MCK’s F, reflecting a more favorable recent EPS-estimate revision trend.

Combined with CAH’s more than 20% specialty growth, expanding MSO platform, double-digit growth in Other businesses and technology investments, these factors support a stronger earnings-acceleration narrative. MCK remains a high-quality operator with strong specialty, oncology, AI and distribution capabilities, but CAH’s combination of valuation, growth and estimate momentum makes it the more compelling healthcare distributor stock currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McKesson (MCK - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this prescription drug distributor have returned -1.5%, compared to the Zacks S&P 500 composite's +1.3% change. During this period, the Zacks Medical - Dental Supplies industry, which McKesson falls in, has lost 1.7%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

McKesson is expected to post earnings of $10.72 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.

The consensus earnings estimate of $44.64 for the current fiscal year indicates a year-over-year change of +14.1%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $49.83 indicates a change of +11.6% from what McKesson is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for McKesson.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of McKesson, the consensus sales estimate of $110.14 billion for the current quarter points to a year-over-year change of +6.8%. The $429.09 billion and $459.25 billion estimates for the current and next fiscal years indicate changes of +6.4% and +7%, respectively.

Last Reported Results and Surprise HistoryMcKesson reported revenues of $105.38 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $9.93 for the same period compares with $8.26 a year ago.

Compared to the Zacks Consensus Estimate of $104.39 billion, the reported revenues represent a surprise of +0.95%. The EPS surprise was +5.19%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

McKesson is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about McKesson. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

IRVING, Texas--(BUSINESS WIRE)--McKesson Corporation (NYSE: MCK) will release its second quarter fiscal 2027 financial results after market close on Wednesday, November 4, 2026. The company will host a live webcast of the earnings conference call for investors at 4:30 PM Eastern Time to review its financial results. The live and archived audio webcast will be available on McKesson's Investor Relations website. About McKesson Corporation McKesson Corporation is a diversified healthcare services.

Nykredit A S purchased a new position in McKesson Corporation (NYSE:MCK – Free Report) during the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The firm purchased 48,302 shares of the company’s stock, valued at approximately $36,497,000.

Several other hedge funds and other institutional investors have also modified their holdings of the business. Delos Wealth Advisors LLC acquired a new stake in shares of McKesson during the 2nd quarter worth approximately $27,000. Kingdom Financial Group LLC. acquired a new stake in McKesson in the fourth quarter worth $33,000. Greykasell Wealth Strategies Inc. lifted its stake in McKesson by 104.8% in the fourth quarter. Greykasell Wealth Strategies Inc. now owns 43 shares of the company’s stock valued at $35,000 after buying an additional 22 shares during the last quarter. Clearstead Trust LLC bought a new stake in McKesson in the second quarter valued at $37,000. Finally, Evelyn Partners Investment Management Services Ltd acquired a new position in shares of McKesson during the first quarter valued at $45,000. 85.07% of the stock is owned by institutional investors and hedge funds.

McKesson Price Performance Shares of NYSE:MCK opened at $874.02 on Friday. The stock has a market cap of $101.90 billion, a price-to-earnings ratio of 23.39, a PEG ratio of 1.75 and a beta of 0.30. McKesson Corporation has a 12 month low of $687.68 and a 12 month high of $999.00. The stock’s 50 day moving average price is $869.09 and its 200 day moving average price is $838.65.

McKesson (NYSE:MCK – Get Free Report) last issued its quarterly earnings results on Wednesday, August 5th. The company reported $9.93 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $9.56 by $0.37. McKesson had a negative return on equity of 253.21% and a net margin of 1.12%.The firm had revenue of $105.38 billion during the quarter, compared to analyst estimates of $103.88 billion. During the same period last year, the company posted $8.26 EPS. The firm’s quarterly revenue was up 7.7% on a year-over-year basis. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. On average, sell-side analysts expect that McKesson Corporation will post 44.64 EPS for the current year. McKesson Increases Dividend The firm also recently declared a quarterly dividend, which will be paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st will be issued a $0.94 dividend. This represents a $3.76 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date of this dividend is Tuesday, September 1st. This is a positive change from McKesson’s previous quarterly dividend of $0.82. McKesson’s dividend payout ratio is currently 10.06%.

Insider Activity In related news, CEO Brian Tyler sold 8,463 shares of the business’s stock in a transaction that occurred on Tuesday, July 7th. The shares were sold at an average price of $793.56, for a total value of $6,715,898.28. Following the sale, the chief executive officer directly owned 5,919 shares in the company, valued at $4,697,081.64. The trade was a 58.84% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bradley Lerman sold 301 shares of the stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $892.33, for a total transaction of $268,591.33. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 8,875 shares of company stock worth $7,083,441. Corporate insiders own 0.06% of the company’s stock.

Wall Street Analyst Weigh In A number of analysts recently weighed in on the stock. TD Cowen increased their price objective on shares of McKesson from $989.00 to $1,006.00 and gave the stock a “buy” rating in a report on Thursday, August 6th. Barclays boosted their target price on shares of McKesson from $925.00 to $1,000.00 and gave the company an “overweight” rating in a research note on Wednesday, August 19th. Evercore restated an “outperform” rating on shares of McKesson in a research report on Thursday, August 6th. Weiss Ratings upgraded shares of McKesson from a “buy (b-)” rating to a “buy (b)” rating in a research note on Friday, September 4th. Finally, Royal Bank Of Canada reaffirmed a “sector perform” rating and set a $845.00 price target on shares of McKesson in a report on Monday, September 14th. Fourteen research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $973.44.

View Our Latest Research Report on McKesson

McKesson Profile (Free Report)

McKesson Corporation is a healthcare services and distribution company that supplies pharmaceuticals, specialty drugs, medical products and related services to pharmacies, hospitals, health systems, physicians and other healthcare providers. Its operations support the movement of prescription medicines and medical-surgical supplies from manufacturers to healthcare organizations and patients.

The company’s businesses include pharmaceutical distribution, specialty pharmaceutical services, medical-surgical supply distribution and technology solutions for pharmacies and other healthcare providers.

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Bank of America Corp DE acquired a new stake in McKesson Corporation (NYSE: MCK) during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm acquired 1,321,991 shares of the company's stock, valued at approximately $998,896,000. Bank of America Corp DE owned

Cardinal Health Earnings: Can Perfection Get Priced In Twice?McKesson NYSE: MCK executives said the company’s first-quarter performance supported a higher full-year earnings outlook, citing broad-based growth across its North American Pharmaceutical, Oncology & Multispecialty and Prescription Technology Solutions businesses.

Speaking at the Morgan Stanley Global Healthcare Conference, Executive Vice President and Chief Financial Officer Kenny Cheung said McKesson raised its full-year earnings-per-share guidance by $0.40 to a range of $44.20 to $45.00. The revised range implies growth of roughly 13% to 15%, he said. After adjusting for the company’s Norway exit and a prior-year gain on the sale of U.S. Oncology, Cheung said the outlook represents 15% to 17% year-over-year growth.

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3 Healthcare Stocks With Fresh Dividend Hikes and Different Income Profiles“We are pleased with our business performance,” Cheung said, adding that three of the company’s four reportable segments posted double-digit growth in the first quarter.

Precision Medicine Group Deal Extends Oncology Strategy Chief Executive Officer Brian Tyler said McKesson’s pending acquisition of Precision Medicine Group fits the company’s longstanding strategy of expanding its oncology and biopharma-services capabilities. He said the target’s clinical research operations would complement McKesson’s Sarah Cannon Research Institute, Ontada data and analytics business, and U.S. Oncology Network.

MarketBeat Week in Review – 07/27- 07/31Tyler said the acquisition could help expand clinical-trial access for patients treated in community oncology settings. He noted that many oncology trials struggle to enroll patients quickly enough and said community practices could provide an important source of trial participants outside academic medical centers.

“We think that the combination of those assets is actually quite unique and a big unlock for us,” Tyler said.

McKesson has roughly 3,400 providers in its U.S. Oncology Network after expanding the network over the last eight to 10 years, Tyler said. He added that Sarah Cannon participated in the management of trials for 43 of the 52 adult oncology drugs that reached the market in 2025.

Cheung said the Precision Medicine Group transaction is expected to be accretive strategically and financially, though McKesson plans to provide additional financial details closer to the closing date. The transaction remains subject to regulatory approvals.

Segment Growth and Investments Cheung said the Oncology & Multispecialty segment generated 33% reported revenue growth and approximately 41% adjusted operating profit growth during the first quarter. Excluding the impact of the prior-year Core Ventures acquisition, he said operating profit growth was approximately 15%, near the midpoint of McKesson’s full-year guidance range of 13.5% to 17.5%.

Growth was supported by patient traffic in the U.S. Oncology and PRISM Vision Group networks, prescription and specialty-drug utilization, and new business, according to Cheung.

Prescription Technology Solutions, or RxTS, recorded approximately 9% revenue growth and 13% adjusted operating profit growth in the first quarter, Cheung said. McKesson’s full-year adjusted operating profit outlook for the segment is 11% to 15% growth.

Cheung said the company is seeing momentum in its affordability and access programs, including its GLP-1 Medicare bid program, which began around July 1. He cautioned that the program remains in its early stages. GLP-1-related business accounts for roughly 11% of RxTS revenue, he said, while the rest of the segment also continues to grow.

Tyler said RxTS’s network of more than 50,000 pharmacies and more than 1 million providers is a competitive differentiator. He said approximately 650 brands work with CoverMyMeds or RxTS.

Contract Renewals, Policy and Medical-Surgical Separation Tyler said McKesson’s distribution relationship with CVS has extended for more than 20 years. The current contract runs through June 2027, he said, declining to discuss specific negotiations. He added that roughly one-third of McKesson’s contracts typically come up for renewal each year.

On policy, Tyler said the company has not seen changes in customer behavior or volume flows related to current proposals involving the 340B drug-pricing program. He also discussed Inflation Reduction Act Part B drug provisions announced in 2026 that are not scheduled to take effect until 2028. Tyler said the company believes a direct-rebate model from manufacturers to CMS could help lower government spending while insulating community providers from economic harm.

In North American Pharmaceutical, Cheung said first-quarter revenue rose 5% and adjusted operating profit increased 19%. He attributed results to broad-based customer and product momentum, including specialty and health-system growth, along with timing related to branded launches and brand-to-generic conversions. McKesson expects to increase investments in business growth, automation and technology during the second half of the year.

McKesson’s Medical-Surgical business, which has been named Wellverse, reported 4% revenue growth and an approximately 20% year-over-year decline in adjusted operating profit in the first quarter. Cheung cited product mix and one-time administrative costs. The company continues to target an initial public offering exit in the second half of 2027, subject to market conditions, Tyler said.

Cheung said McKesson does not expect tariffs to have a material impact on the Wellverse business because it does not manufacture products and most of the products it purchases are sourced in the U.S. for the U.S. The company expects to continue investing in its higher-growth oncology, multispecialty and biopharma-services platforms while maintaining an investment-grade balance sheet and returning capital to shareholders.

About McKesson (NYSE:MCK)McKesson Corporation is a healthcare services and distribution company that supplies pharmaceuticals, specialty drugs, medical products and related services to pharmacies, hospitals, health systems, physicians and other healthcare providers. Its operations support the movement of prescription medicines and medical-surgical supplies from manufacturers to healthcare organizations and patients.

The company's businesses include pharmaceutical distribution, specialty pharmaceutical services, medical-surgical supply distribution and technology solutions for pharmacies and other healthcare providers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Baird Financial Group Inc. lifted its holdings in shares of McKesson Corporation (NYSE:MCK – Free Report) by 4.1% in the 2nd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 39,670 shares of the company’s stock after buying an additional 1,553 shares during the quarter. Baird Financial Group Inc.’s holdings in McKesson were worth $29,975,000 at the end of the most recent quarter.

Other large investors have also recently bought and sold shares of the company. Brighton Jones LLC raised its stake in shares of McKesson by 46.3% in the 4th quarter. Brighton Jones LLC now owns 2,523 shares of the company’s stock valued at $1,438,000 after purchasing an additional 798 shares during the period. Caxton Associates LLP acquired a new stake in shares of McKesson in the 1st quarter valued at approximately $233,000. Sivia Capital Partners LLC increased its stake in shares of McKesson by 77.9% during the 2nd quarter. Sivia Capital Partners LLC now owns 685 shares of the company’s stock worth $502,000 after purchasing an additional 300 shares during the last quarter. Treasurer of the State of North Carolina lifted its stake in McKesson by 0.9% in the 2nd quarter. Treasurer of the State of North Carolina now owns 58,623 shares of the company’s stock valued at $42,958,000 after purchasing an additional 508 shares during the last quarter. Finally, Osterweis Capital Management Inc. bought a new position in shares of McKesson during the 2nd quarter worth approximately $166,000. Institutional investors own 85.07% of the company’s stock.

McKesson Stock Performance Shares of NYSE MCK opened at $881.22 on Friday. McKesson Corporation has a fifty-two week low of $687.68 and a fifty-two week high of $999.00. The company has a 50 day simple moving average of $858.30 and a two-hundred day simple moving average of $840.99. The company has a market capitalization of $102.74 billion, a price-to-earnings ratio of 23.58, a P/E/G ratio of 1.77 and a beta of 0.30.

McKesson (NYSE:MCK – Get Free Report) last issued its quarterly earnings results on Wednesday, August 5th. The company reported $9.93 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $9.56 by $0.37. The business had revenue of $105.38 billion during the quarter, compared to analyst estimates of $103.88 billion. McKesson had a negative return on equity of 253.21% and a net margin of 1.12%.McKesson’s revenue for the quarter was up 7.7% compared to the same quarter last year. During the same quarter in the prior year, the business posted $8.26 EPS. McKesson has set its FY 2027 guidance at 44.200-45.000 EPS. On average, analysts forecast that McKesson Corporation will post 44.65 earnings per share for the current fiscal year. McKesson Increases Dividend The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Tuesday, September 1st will be issued a dividend of $0.94 per share. This represents a $3.76 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date is Tuesday, September 1st. This is a positive change from McKesson’s previous quarterly dividend of $0.82. McKesson’s dividend payout ratio (DPR) is 10.06%.

Analysts Set New Price Targets A number of analysts have issued reports on MCK shares. Wells Fargo & Company boosted their price objective on shares of McKesson from $812.00 to $933.00 and gave the company an “equal weight” rating in a report on Tuesday, August 11th. Evercore reissued an “outperform” rating on shares of McKesson in a report on Thursday, August 6th. UBS Group raised their price target on shares of McKesson from $1,050.00 to $1,080.00 and gave the stock a “buy” rating in a report on Thursday, August 6th. Royal Bank Of Canada assumed coverage on McKesson in a report on Wednesday, August 19th. They set a “sector perform” rating and a $845.00 price target for the company. Finally, Morgan Stanley reaffirmed an “overweight” rating on shares of McKesson in a research report on Friday, August 7th. Fourteen analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average target price of $973.44.

Check Out Our Latest Report on MCK

Insiders Place Their Bets In other McKesson news, CAO B Jr sold 111 shares of McKesson stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $891.45, for a total transaction of $98,950.95. Following the completion of the sale, the chief accounting officer directly owned 521 shares of the company’s stock, valued at $464,445.45. The trade was a 17.56% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Brian Tyler sold 8,463 shares of the stock in a transaction dated Tuesday, July 7th. The shares were sold at an average price of $793.56, for a total value of $6,715,898.28. Following the completion of the sale, the chief executive officer owned 5,919 shares of the company’s stock, valued at approximately $4,697,081.64. This trade represents a 58.84% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 17,338 shares of company stock worth $13,643,366 in the last ninety days. 0.06% of the stock is owned by company insiders.

McKesson Company Profile (Free Report)

McKesson Corporation is a healthcare services and distribution company that supplies pharmaceuticals, specialty drugs, medical products and related services to pharmacies, hospitals, health systems, physicians and other healthcare providers. Its operations support the movement of prescription medicines and medical-surgical supplies from manufacturers to healthcare organizations and patients.

The company’s businesses include pharmaceutical distribution, specialty pharmaceutical services, medical-surgical supply distribution and technology solutions for pharmacies and other healthcare providers.

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In the latest close session, McKesson (MCK - Free Report) was down 1.21% at $880.86. The stock's performance was behind the S&P 500's daily loss of 0.59%. On the other hand, the Dow registered a loss of 0.6%, and the technology-centric Nasdaq decreased by 0.65%.

Shares of the prescription drug distributor witnessed a gain of 1.47% over the previous month, beating the performance of the Medical sector with its loss of 0.36%, and the S&P 500's loss of 1.37%.

Market participants will be closely following the financial results of McKesson in its upcoming release. The company is predicted to post an EPS of $10.75, indicating a 9.03% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $110.14 billion, reflecting a 6.78% rise from the equivalent quarter last year.

MCK's full-year Zacks Consensus Estimates are calling for earnings of $44.65 per share and revenue of $429.09 billion. These results would represent year-over-year changes of +14.17% and +6.36%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for McKesson. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0% decrease. As of now, McKesson holds a Zacks Rank of #3 (Hold).

Digging into valuation, McKesson currently has a Forward P/E ratio of 19.97. This denotes a premium relative to the industry average Forward P/E of 17.91.

One should further note that MCK currently holds a PEG ratio of 1.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Dental Supplies was holding an average PEG ratio of 1.77 at yesterday's closing price.

The Medical - Dental Supplies industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 77, which puts it in the top 32% of all 250+ industries.

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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.