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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for McKesson Corporation (NYSE:MCK), increasing the price target from $630.00 to $690.00. The stock, currently trading at $693.53 and rated "GREAT" by InvestingPro’s Financial Health Score, has maintained its Neutral rating from the firm.
The revision comes after McKesson, with its substantial market capitalization of $86.92 billion, finalized its acquisition of Prism Vision for $850 million on Wednesday. Additionally, the company’s pending acquisition of a majority stake in Florida Cancer Specialists (FCS), valued at approximately $2.5 billion, is anticipated to close shortly, despite the deal being public for eight months. Mizuho’s analysts have incorporated the expected financial impact of FCS into their projections, even though the acquisition has not been finalized.
Mizuho’s analysts expect the FCS deal to contribute approximately $0.45 to $0.50 to McKesson’s earnings per share (EPS) for nearly 9 to 10 months in the fiscal year 2026. Consequently, the firm has increased its FY26 EPS estimate for McKesson to $37.00, up from the previous $36.10. The stock has shown remarkable strength with a 44% return over the past six months, according to InvestingPro data.
The firm bases its raised price target on a 17 times price-to-earnings (P/E) ratio applied to the higher calendar year 2026 EPS estimate of $40.70. McKesson is scheduled to announce its second-quarter fiscal year 2025 earnings and provide initial guidance for fiscal year 2026 on May 8. For deeper insights into McKesson’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro. Mizuho’s analysts note that if the FCS acquisition has not been completed by that date, it is unlikely to be included in McKesson’s initial FY26 guidance.
In other recent news, McKesson Corporation reported third-quarter earnings with adjusted earnings per share (EPS) of $8.03, missing analyst expectations of $8.27. Revenue for the quarter was $95.29 billion, up 18% year-over-year but below the forecasted $95.77 billion. Despite the earnings miss, McKesson raised its fiscal 2025 adjusted EPS guidance to a range of $32.55 to $32.95, slightly above the analyst consensus midpoint of $32.67. The U.S. Pharmaceutical (TADAWUL:2070) segment, McKesson’s largest business unit, saw a 19% revenue increase, driven by higher prescription volumes and oncology platform growth.
In a strategic move, McKesson announced plans to acquire an 80% controlling interest in PRISM Vision Holdings, LLC, for $850 million and Florida Cancer Specialists & Research Institute for $2.5 billion. Morgan Stanley (NYSE:MS) maintained its Overweight rating on McKesson, increasing the price target to $745, citing strong growth prospects and sustainable profit margins. Citi also raised its price target for McKesson shares to $685, following a mixed financial performance with notable strength in the pharmaceutical segment. Additionally, S&P Global Ratings revised McKesson’s outlook to positive, affirming its ’BBB+’ rating, driven by anticipated growth in the U.S. pharmaceutical segment and prescription technology business.
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