Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Leerink Partners raised its price target on McKesson (NYSE:MCK) to $850.00 from $785.00 on Wednesday, while maintaining an Outperform rating on the stock. The healthcare giant, currently trading at $741.31 and near its 52-week high of $748.75, has demonstrated remarkable strength with a 55% return over the past year.
The research firm cited better-than-expected growth dynamics across McKesson’s pharmaceutical segments, including both the "core" North America Pharma and the "growth" Oncology & Multispecialty segments.
Leerink Partners increased its target multiple from approximately 19x CY26 P/E to about 20x, noting that the company’s enterprise growth algorithm stands out among both healthcare peers and the broader market landscape.
The firm also highlighted that having certainty on the Med-Surg process helps support its positive outlook, even though the timeline is expected to be long.
Leerink Partners reiterated its view that pharmaceutical distributors deserve as much as a 20x P/E multiple, and specifically pointed to McKesson’s "clear path to ongoing broad enterprise growth."
In other recent news, McKesson Corporation reported its first-quarter fiscal year 2026 earnings, surpassing Wall Street expectations with an earnings per share of $8.26, compared to the forecasted $8.19. The company also reported revenue of $97.8 billion, exceeding the anticipated $95.82 billion. In addition to these financial results, McKesson announced it will reorganize its reportable segments effective in the second quarter of fiscal year 2026, aiming for enhanced strategic alignment and transparency. The restructuring will include five segments: North American Pharmaceutical, Oncology and Multispecialty, Prescription Technology Solutions, Medical-Surgical Solutions, and Other, which includes its Norwegian operations under a sale agreement.
Jefferies recently lowered its price target for McKesson to $84 from $90, maintaining a Buy rating, citing tariff and geopolitical pressures. UBS also adjusted its price target on McKesson, reducing it to $79 from $83, while maintaining a Neutral rating. UBS analyst Kevin Caliendo described McKesson’s capital allocation strategy as a solid use of capital, increasing exposure to a region with growing per capita consumption. These developments highlight McKesson’s ongoing efforts to adapt to market dynamics while maintaining its fiscal guidance.
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