On Wednesday, Mizuho (NYSE:MFG) Securities reiterated its Neutral rating on McKesson Corporation (NYSE:NYSE:MCK).
This confirmation follows McKesson’s recent presentation at an investor conference on Tuesday.
Mizuho’s analysts highlighted several key points from the conference, including management’s confidence in achieving the forecasted accelerated EBIT growth for the second half of fiscal 2025, as opposed to the EBIT growth realized in the first half of the same fiscal year.
Although McKesson has not updated its guidance early in the calendar year 2025 like its competitors Cardinal Health (NYSE:CAH) and Owens & Minor (NYSE:OMI), the company’s management remains optimistic about reaching their ambitious EBIT targets.
This outlook is based on the performance expectations for the remainder of the fiscal year.
In the Med-Surg Solutions segment, management observed that the late 2024 flu and seasonal illness season, impacting the third quarter of fiscal 2025, is progressing slower than usual, with only 60% of the normal historical prevalence. Despite this, the slower season had already been factored into the previous guidance for the segment.
Furthermore, the management reaffirmed their confidence in achieving an 11-15% growth in EBIT for the Prescription Technology Solutions (RxTS) segment. This projection is supported by the annual verification programs scheduled for the fourth quarter of fiscal 2025.
The reaffirmation of the Neutral rating and the $630 price target reflects Mizuho’s consistent view on McKesson’s stock performance.
The firm has made slight adjustments to its tax rate estimates, resulting in a reduced earnings per share (EPS) prediction for the third quarter of fiscal 2025 and an increased EPS forecast for the fourth quarter. Their full-year fiscal 2025 EPS estimate remains unchanged at $32.50.
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