Yahoo Finance Here's Why You Should Hold on to McKesson (MCK) Stock Now
McKesson Corporation MCK is well poised for growth backed by strong segmental performances and solid prospects in the pharmaceutical and medical supplies distribution market.
The stock currently carries a Zacks Rank #2 (Buy).
Price Performance
Shares of McKesson have gained 11.6%, against the industry’s decline of 5.4% over the past year. Meanwhile, the S&P 500 Index’s rallied 0.9%.
Factors to Bolster McKesson
Being a major player in the pharmaceutical and medical supplies distribution market, McKesson has been benefiting from its position over a considerable period of time. The Distribution Solutions segment caters to a wide range of customers and businesses and stands to gain from increased generic utilization, inflation in generics driven by several patent expirations in the next few years, and an aging population.
Notably, the company announced a multi-year strategic growth initiative update that is currently expected to generate approximately $400-$500 (up from the previously guided range of $300-$400 million) million in annual pre-tax gross savings. This will be substantially realized by the end of fiscal 2021.
McKesson continues to benefit from acquisitions and strategic collaborations, which in turn will drive the company’s growth while contributing substantially to the top line.
Management aims to increase efficiency, accelerate execution and improve long-term performance through initiatives that consist of multiple growth pillars. The company is anticipated to drive increased efficiency and productivity, backed by Based on strong business strategies.
With respect to McKesson Canada, it is encouraging to note that the company made substantial progress in mitigating the impact of government-imposed generic pricing cuts throughout fiscal 2019.
Notably, raised fiscal 2020 adjusted earnings outlook is an added positive.
Which Way Are Estimates Headed?
For 2020, the Zacks Consensus Estimate for revenues is pegged at $222.57 billion, indicating an improvement of 3.9% from the year-ago period. For adjusted earnings per share, the same stands at $14.35, suggesting growth of 5.8% from the year-ago reported figure.
Other Key Picks
Some other top-ranked stocks from the broader medical space are Baxter International Inc. BAX, Amedisys, Inc. AMED and HMS Holdings Corp. HMSY, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Baxter has a long-term earnings growth rate of 12.8%.
Amedisys has a long-term earnings growth rate of 16.3%.
HMS Holdings has a long-term earnings growth rate 11%.
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