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Here's Why You Should Add McKesson (MCK) to Your Portfolio Now
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McKesson Corporation (MCK - Free Report) is well-poised for growth backed by multi-year strategic growth initiative and distribution solutions segment.
The stock has gained 5.4%, compared with the industry’s growth of 1.9% in a year’s time. Also, the S&P 500 Index has rallied 4.3% in the same time frame.
McKesson — with a market capitalization of $29.15 billion — is a health care services and information technology company. It anticipates earnings to improve 7.2% over the next five years. Moreover, the company has a trailing four-quarter earnings surprise of 14.4%, on average.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).
Key Catalysts
McKesson recently announced a multi-year strategic growth initiative focused on creating innovative new solutions that improve patient care delivery and drive incremental profits. The plan is to implement differential pricing for brand, generic, specialty, biosimilar and OTC (over-the-counter) drug classes in line with services offered to both customers and manufacturers.
As discussed in the fiscal first-quarter 2021 earnings call, the company remains committed to its multi-year strategic growth initiative update that is currently expected to generate approximately $400 million to $500 million in annual pre-tax gross savings. This will be substantially realized by the end of fiscal 2021.
Moreover, the company is a major player in the pharmaceutical and medical supplies distribution market. The Distribution Solutions segment caters to a wide range of customers and businesses, and stands to benefit from increased generic utilization, inflation in generics courtesy of several patent expirations in the next few years and an aging population.
In December 2020, McKesson started to distribute Moderna's COVID-19 vaccine within 48 hours of its Emergency Use Authorization (EUA) approval by the FDA as it is within the scope of its contract with Centers for Disease Control and Prevention. Further, throughout January 2021, McKesson managed to successfully distribute above 25 million doses of the COVID-19 vaccine to sites across the country. From the distribution standpoint, the company remains on track to meet the US government's plan to distribute hundreds of millions of refrigerated and frozen vaccines.
Additionally, the company has been making efforts in preparation and distribution of the ancillary kits required to administer all the COVID-19 vaccines, which includes the Pfizer ultra-frozen vaccine (although Pfizer's vaccine is not distributed by McKesson). The company is producing significant number of kits every week to support 10-15 million doses and has managed to assemble enough kits to support above 250 million doses to-date.
Estimates Trend
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $239.74 billion, indicating an improvement of 3.8% from the year-ago period. The same for adjusted earnings per share stands at $17.17, suggesting growth of 14.9% from the prior-year reported figure.
Hologic’s long-term earnings growth rate is estimated at 15.4%.
IDEXX’s long-term earnings growth rate is estimated at 15.8%.
Abbott’s long-term earnings growth rate is estimated at 14.1%.
5G Revolution: 3 Stocks to Make Your Move
With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.
Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .
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Here's Why You Should Add McKesson (MCK) to Your Portfolio Now
McKesson Corporation (MCK - Free Report) is well-poised for growth backed by multi-year strategic growth initiative and distribution solutions segment.
The stock has gained 5.4%, compared with the industry’s growth of 1.9% in a year’s time. Also, the S&P 500 Index has rallied 4.3% in the same time frame.
McKesson — with a market capitalization of $29.15 billion — is a health care services and information technology company. It anticipates earnings to improve 7.2% over the next five years. Moreover, the company has a trailing four-quarter earnings surprise of 14.4%, on average.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).
Key Catalysts
McKesson recently announced a multi-year strategic growth initiative focused on creating innovative new solutions that improve patient care delivery and drive incremental profits. The plan is to implement differential pricing for brand, generic, specialty, biosimilar and OTC (over-the-counter) drug classes in line with services offered to both customers and manufacturers.
As discussed in the fiscal first-quarter 2021 earnings call, the company remains committed to its multi-year strategic growth initiative update that is currently expected to generate approximately $400 million to $500 million in annual pre-tax gross savings. This will be substantially realized by the end of fiscal 2021.
Moreover, the company is a major player in the pharmaceutical and medical supplies distribution market. The Distribution Solutions segment caters to a wide range of customers and businesses, and stands to benefit from increased generic utilization, inflation in generics courtesy of several patent expirations in the next few years and an aging population.
In December 2020, McKesson started to distribute Moderna's COVID-19 vaccine within 48 hours of its Emergency Use Authorization (EUA) approval by the FDA as it is within the scope of its contract with Centers for Disease Control and Prevention. Further, throughout January 2021, McKesson managed to successfully distribute above 25 million doses of the COVID-19 vaccine to sites across the country. From the distribution standpoint, the company remains on track to meet the US government's plan to distribute hundreds of millions of refrigerated and frozen vaccines.
Additionally, the company has been making efforts in preparation and distribution of the ancillary kits required to administer all the COVID-19 vaccines, which includes the Pfizer ultra-frozen vaccine (although Pfizer's vaccine is not distributed by McKesson). The company is producing significant number of kits every week to support 10-15 million doses and has managed to assemble enough kits to support above 250 million doses to-date.
Estimates Trend
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $239.74 billion, indicating an improvement of 3.8% from the year-ago period. The same for adjusted earnings per share stands at $17.17, suggesting growth of 14.9% from the prior-year reported figure.
Other Stocks to Consider
Some other top-ranked stocks from the broader medical space are Hologic, Inc. (HOLX - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Abbott Laboratories (ABT - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is estimated at 15.4%.
IDEXX’s long-term earnings growth rate is estimated at 15.8%.
Abbott’s long-term earnings growth rate is estimated at 14.1%.
5G Revolution: 3 Stocks to Make Your Move
With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.
Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .
Smartest stock for 5G telecom
Safest investment in 5G hardware
Single best 5G buy of all!
Download now. Today the report is FREE >>