McKesson Corp. (MCK) Downgraded by Zacks Investment Research
McKesson Corp. (NYSE:MCK) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued to investors on Thursday.
According to Zacks, “McKesson depends heavily on the pharmaceutical distribution business, which is characterized by slow growth. Unfavorable movements in foreign exchange rates continue to hurt sales. In addition McKesson expects weaker generic pharmaceutical pricing trends, specific to the company’s mix of business, in 2017. Moreover, the expiration of McKesson’s contract with Optum will be a major headwind. Operating performance of Celesio which was disappointing in the fiscal first quarter of 2017 due to reimbursement cuts, is expected to continue through the year. However, the company has been actively pursuing deals and acquisitions to drive growth. McKesson will separate its Technology business into a new healthcare information technology company, which is slated to close in the first half of calendar 2017. The spin-off will enable the company to concentrate on the primary pharmaceuticals distribution business.”
Several other analysts also recently weighed in on MCK. Robert W. Baird restated a “buy” rating and set a $220.00 target price on shares of McKesson Corp. in a research note on Wednesday, June 29th. FBR & Co restated a “buy” rating and set a $210.00 target price on shares of McKesson Corp. in a research note on Wednesday, June 29th. Vetr upgraded McKesson Corp. from a “hold” rating to a “buy” rating and set a $188.01 target price for the company in a research note on Monday, June 27th. JPMorgan Chase & Co. restated a “buy” rating on shares of McKesson Corp. in a research note on Thursday, June 30th. Finally, Deutsche Bank AG restated a “buy” rating on shares of McKesson Corp. in a research note on Monday, July 18th. One research analyst has rated the stock with a sell rating, eight have assigned a hold rating, ten have given a buy rating and one has given a strong buy rating to the stock. The stock presently has an average rating of “Buy” and a consensus target price of $201.17.
McKesson Corp. (NYSE:MCK) opened at 165.40 on Thursday. The stock has a 50 day moving average price of $181.13 and a 200-day moving average price of $178.92. McKesson Corp. has a 12 month low of $148.29 and a 12 month high of $202.20. The stock has a market cap of $37.33 billion, a PE ratio of 17.18 and a beta of 0.95.
McKesson Corp. (NYSE:MCK) last released its quarterly earnings results on Wednesday, July 27th. The company reported $3.50 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.33 by $0.17. The company earned $49.73 billion during the quarter, compared to the consensus estimate of $50.32 billion. McKesson Corp. had a return on equity of 31.62% and a net margin of 1.15%. The firm’s revenue was up 4.6% on a year-over-year basis. During the same quarter in the prior year, the company posted $3.14 EPS. On average, analysts expect that McKesson Corp. will post $13.63 EPS for the current year.
The company also recently disclosed a quarterly dividend, which will be paid on Monday, October 3rd. Shareholders of record on Thursday, September 1st will be given a $0.28 dividend. The ex-dividend date is Tuesday, August 30th. This represents a $1.12 dividend on an annualized basis and a yield of 0.67%. McKesson Corp.’s payout ratio is 11.64%.
In other McKesson Corp. news, CFO James A. Beer sold 5,500 shares of the stock in a transaction on Thursday, July 14th. The stock was sold at an average price of $199.00, for a total value of $1,094,500.00. Following the transaction, the chief financial officer now directly owns 12,412 shares in the company, valued at approximately $2,469,988. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director M Christine Jacobs sold 915 shares of the stock in a transaction on Monday, August 22nd. The shares were sold at an average price of $193.78, for a total value of $177,308.70. The disclosure for this sale can be found here. 1.15% of the stock is owned by company insiders.
Hedge funds and other institutional investors have recently made changes to their positions in the stock. Natixis purchased a new position in shares of McKesson Corp. during the first quarter worth approximately $26,933,000. Orbis Allan Gray Ltd purchased a new position in shares of McKesson Corp. during the first quarter worth approximately $63,790,000. PGGM Investments raised its position in shares of McKesson Corp. by 202.3% in the second quarter. PGGM Investments now owns 352,300 shares of the company’s stock worth $65,757,000 after buying an additional 235,776 shares during the last quarter. Legal & General Group Plc raised its position in shares of McKesson Corp. by 2.8% in the first quarter. Legal & General Group Plc now owns 1,124,131 shares of the company’s stock worth $176,779,000 after buying an additional 30,231 shares during the last quarter. Finally, Checchi Capital Advisers LLC raised its position in shares of McKesson Corp. by 3.4% in the second quarter. Checchi Capital Advisers LLC now owns 1,539 shares of the company’s stock worth $287,000 after buying an additional 51 shares during the last quarter. Hedge funds and other institutional investors own 84.77% of the company’s stock.
About McKesson Corp.
McKesson Corporation (McKesson) is a pharmaceutical distribution services and information technology company. The Company delivers an offering of pharmaceuticals and medical supplies. It operates through two segments: McKesson Distribution Solutions and McKesson Technology Solutions. The Distribution Solutions segment distributes branded and generic pharmaceutical drugs and other healthcare-related products around the world and provides practice management, technology, clinical support and business solutions to community-based oncology and other specialty practices.
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