McKesson (MCK Quick QuoteMCK - Free Report) shares soared 3.2% in the last trading session to close at $194.36. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.2% loss over the past four weeks.

McKesson witnessed solid price appreciation following the news of the New York Attorney General Letitia James’ announcement of a $1.1 billion settlement agreement with three of the nation’s largest drug distributors, McKesson being one of them. This will help the New York State to combat the ongoing opioid epidemic. Market is also optimistic about the company’s deal with the PHOENIX group to sell its European businesses in France, Italy, Ireland, Portugal, Belgium and Slovenia to the latter.

This prescription drug distributor is expected to post quarterly earnings of $4.15 per share in its upcoming report, which represents a year-over-year change of +49.8%. Revenues are expected to be $59.6 billion, up 7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For McKesson, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MCK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>