Jefferies raises McKesson stock target to $800; maintains buy

Published 09/05/2025, 14:50
Jefferies raises McKesson stock target to $800; maintains buy

On Friday, Jefferies analyst Rob Dickerson increased the price target for McKesson Corporation (NYSE:MCK) shares, setting a new goal of $800, up from the previous $715 target, while reiterating a Buy rating for the stock. The adjustment follows McKesson’s recent fourth-quarter earnings report, which surpassed Wall Street’s expectations by 3%. With a market capitalization of $87.2 billion and trading near its 52-week high, McKesson has shown strong momentum, according to InvestingPro data. Dickerson’s remarks highlighted the company’s performance and its forward guidance, which has addressed key investor concerns.

McKesson reported a robust fiscal fourth quarter, with earnings per share (EPS) outperforming consensus estimates. The company’s impressive 16.2% revenue growth and GREAT Financial Health Score from InvestingPro underscore its strong performance. The company also provided an EPS guidance for fiscal year 2026 that is above current Street expectations. This update has been well-received as it directly responds to recent queries from the investment community regarding McKesson’s future prospects.

In addition to the positive earnings report, McKesson’s management has maintained its long-term EPS growth outlook of 12%-14%. This forecast is a crucial component of Dickerson’s positive valuation thesis for McKesson. Furthermore, the company has increased its operating income growth projection for its core U.S. Pharmaceutical (TADAWUL:2070) segment by 100 basis points, now expecting growth to be between 6% and 8%.

Dickerson also commented on McKesson’s valuation, which he finds appealing, citing a price-to-earnings (P/E) ratio of 19 times. Currently trading at a P/E of 31.89, InvestingPro analysis suggests the stock is slightly undervalued based on its proprietary Fair Value model. The analyst’s comments suggest a confidence in the company’s growth trajectory and financial health, reinforcing the Buy rating and the heightened price target for McKesson shares. The new price target and the maintained Buy rating reflect Jefferies’ optimistic outlook on McKesson’s financial performance and market position. Discover 14 additional exclusive ProTips and comprehensive valuation metrics for MCK with an InvestingPro subscription.

In other recent news, McKesson Corporation reported its Q3 2025 financial results, highlighting an adjusted earnings per share (EPS) of $10.12, which surpassed the forecast of $9.81. However, the company’s revenue fell short of expectations, coming in at $90.82 billion against a forecast of $93.48 billion. Despite the EPS beat, the revenue miss has raised concerns among investors. McKesson’s strategic acquisitions, including controlling interests in Prism Vision and pending acquisitions in CORE Ventures, have bolstered its growth in the healthcare services sector. The company has also made significant strides in cost optimization, achieving $100 million in savings. Looking ahead, McKesson has issued guidance for fiscal 2026, projecting revenue growth of 11% to 15% and an EPS range of $36.05 to $37.55. The company plans to separate its Medical (TASE:BLWV) Surgical segment into an independent entity to enhance focus and operational efficiency. Additionally, McKesson’s ongoing efforts in oncology and biopharma services continue to represent attractive market opportunities.

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