McKesson Corp (MCK) stock analysis

P/E above its 5-year median

McKesson's P/E of 28.4 is above its own 5-year median of 26.1.

P/E above the industry

McKesson's P/E of 28.4 is above the Wholesale Trade-non-durable Goods median of 22.6.

EV/EBITDA below its 5-year median

McKesson's EV/EBITDA of 18.7 is below its 5-year median of 19.5.

P/S above the industry

McKesson's price-to-sales of 0.31 is above the Wholesale Trade-non-durable Goods median of 0.30 (book value is negative, so we use sales).

Trading above fair value

The share price of $1102.81 is above our fair value estimate of $878.14.

Margin of safety under 20%

The price is 25.6% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 13.4% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 15.3% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 8.2% over the last twelve months; the Wholesale Trade-non-durable Goods median is -5.1%.

Guidance raised

McKesson raised its Fiscal 2027 Adjusted Earnings per Diluted Share outlook on Aug 5, 2026.

Gross margin improving

Gross margin was 3.7% over the last twelve months, against 3.6% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 1481%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 1.1% over the last twelve months, against a 5-year average of 1.0%.

Net margin above the industry

McKesson's net margin of 1.1% is above the Wholesale Trade-non-durable Goods median of -13.1%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 81.5% of total debt.

Interest well covered

Operating income covers interest expense 21.9 times.

Short-term assets don't cover short-term debts

Current assets are 0.90 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.84; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

McKesson paid dividends worth 0.3% of the share price over the last twelve months.

Yield below Treasuries

The 0.3% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; McKesson yields 0.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 8.5% of net income.

Covered by free cash flow

Dividends take 5.6% of free cash flow.