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Investing.com - UBS has lowered its price target on McKesson (NYSE:MCK) to $79.00 from $83.00 while maintaining a Neutral rating on the stock. The healthcare provider, currently trading at $706 and maintaining a "GREAT" financial health score according to InvestingPro, has shown resilient performance with its stock near 52-week highs.
The price target reduction comes as UBS analyst Kevin Caliendo assessed McKesson’s capital allocation strategy, describing it as "a solid use of capital" that increases the company’s exposure to a region with growing per capita consumption. The company has demonstrated strong capital management, with aggressive share buybacks and 17 consecutive years of dividend increases.
UBS noted that while its fiscal year 2026 and 2027 earnings estimates moved slightly higher, core fundamentals remain a focus point for investors.
The firm highlighted ongoing headwinds in Flavor Solutions and concerns around shifting tariff dynamics as factors affecting McKesson’s outlook.
Despite McKesson trading at what UBS considers an attractive valuation of less than 22 times price-to-earnings ratio, the firm believes improved fundamental performance will be necessary to drive multiple expansion.
In other recent news, McKesson Corporation reported its first-quarter fiscal year 2026 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $8.26, which was higher than the forecasted $8.19. Additionally, McKesson reported revenue of $97.8 billion, exceeding the anticipated $95.82 billion. These results highlight the company’s strong financial performance. Despite the positive earnings and revenue figures, McKesson’s stock experienced a slight decline in after-hours trading. However, the focus remains on the company’s ability to exceed market expectations. These developments are part of the company’s ongoing financial activities. Investors and analysts will continue to monitor McKesson’s performance in the coming quarters.
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