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McKesson (MCK) Hits 52-Week High: What's Aiding the Stock?
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Shares of McKesson Corporation (MCK - Free Report) scaled a new 52-week high of $233.74 on Dec 10, before closing the session marginally lower at $233.09.
Over the past year, this Zacks Rank #1 (Strong Buy) stock has gained 35.3% compared with 15.3% growth of the industry and 29.8% rise of the S&P 500 composite.
McKesson is witnessing an upward trend in its stock price, prompted by its robust Biologics business. A solid second -quarter fiscal 2022 performance, along with its strategic deals, is expected to contribute further. However, stiff competition and weaker generic pharmaceutical pricing trends persist.
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Let’s delve deeper.
Key Growth Drivers
Strength in Biologics: Investors are optimistic about McKesson’s robust Biologics business. Independent specialty pharmacy, Biologics by McKesson, has been making impressive progress of late. This month, the pharmacy was selected by PharmaEssentia USA Corporation as a specialty pharmacy provider of BESREMi (ropeginterferon alfa-2b-njft) for the treatment of adults with polycythemia vera.
The same month, Biologics by McKesson was selected by Takeda Pharmaceuticals as a specialty pharmacy provider of LIVTENCITYTM (maribavir), indicated for the treatment of adults and pediatric patients (above the age of 12 and weighing at least 35 kg) with post-transplant cytomegalovirus infection or disease that is refractory to treatment (with or without genotypic resistance) with ganciclovir, valganciclovir, cidofovir or foscarnet.
Strategic Deals: McKesson has inked a few strategic deals over the past few months, raising investors’ optimism on the stock. MCK, in November, inked an agreement to sell off its U.K. businesses to the pan-European asset management group AURELIUS. The agreement is an important step in advancing McKesson’s efforts to streamline its business and fully exit the European region.
In August, McKesson’s oncology and insights business, Ontada, announced a strategic agreement with Merck, which is expected to facilitate the development of real-world research excellence and innovation.
Strong Q2 Results: McKesson’s robust second-quarter fiscal 2022 results buoy optimism. MCK recorded strong segmental performances by three of its four segments. Raised earnings outlook for fiscal 2022 instills confidence in the stock. Double-digit adjusted operating profit growth across all segments is encouraging. MCK’s crucial role in the COVID-19 response efforts in the United States and abroad through the distribution of COVID-19 vaccines, ancillary supply kits and COVID-19 tests is impressive.
Downsides
Weak Trends: McKesson distributes generic pharmaceuticals, which are subject to price fluctuation. The Distribution Solutions segment had experienced weaker generic pharmaceutical pricing trends, which continue to persist. Continued volatility, unfavorable pricing trends, reimbursement of generic drugs, significant fluctuations in the nature, frequency and magnitude of generic pharmaceutical launches could have a material adverse impact on McKesson.
Stiff Competition: Distribution Solutions faces stiff competition both in terms of price and service from various full-line, short-line and specialty wholesalers, service merchandisers, self-warehousing chains, manufacturers engaged in direct distribution, third-party logistics companies and large-payer organizations. Moreover, McKesson depends on fewer suppliers for its products. As a result, it is not in a position to negotiate pricing.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp, Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .
LabCorp, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $6.82, which beat the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the consensus mark by 13.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.73%.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank of 2.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO's earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN's earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%.
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McKesson (MCK) Hits 52-Week High: What's Aiding the Stock?
Shares of McKesson Corporation (MCK - Free Report) scaled a new 52-week high of $233.74 on Dec 10, before closing the session marginally lower at $233.09.
Over the past year, this Zacks Rank #1 (Strong Buy) stock has gained 35.3% compared with 15.3% growth of the industry and 29.8% rise of the S&P 500 composite.
McKesson is witnessing an upward trend in its stock price, prompted by its robust Biologics business. A solid second -quarter fiscal 2022 performance, along with its strategic deals, is expected to contribute further. However, stiff competition and weaker generic pharmaceutical pricing trends persist.
Let’s delve deeper.
Key Growth Drivers
Strength in Biologics: Investors are optimistic about McKesson’s robust Biologics business. Independent specialty pharmacy, Biologics by McKesson, has been making impressive progress of late. This month, the pharmacy was selected by PharmaEssentia USA Corporation as a specialty pharmacy provider of BESREMi (ropeginterferon alfa-2b-njft) for the treatment of adults with polycythemia vera.
The same month, Biologics by McKesson was selected by Takeda Pharmaceuticals as a specialty pharmacy provider of LIVTENCITYTM (maribavir), indicated for the treatment of adults and pediatric patients (above the age of 12 and weighing at least 35 kg) with post-transplant cytomegalovirus infection or disease that is refractory to treatment (with or without genotypic resistance) with ganciclovir, valganciclovir, cidofovir or foscarnet.
Strategic Deals: McKesson has inked a few strategic deals over the past few months, raising investors’ optimism on the stock. MCK, in November, inked an agreement to sell off its U.K. businesses to the pan-European asset management group AURELIUS. The agreement is an important step in advancing McKesson’s efforts to streamline its business and fully exit the European region.
In August, McKesson’s oncology and insights business, Ontada, announced a strategic agreement with Merck, which is expected to facilitate the development of real-world research excellence and innovation.
Strong Q2 Results: McKesson’s robust second-quarter fiscal 2022 results buoy optimism. MCK recorded strong segmental performances by three of its four segments. Raised earnings outlook for fiscal 2022 instills confidence in the stock. Double-digit adjusted operating profit growth across all segments is encouraging. MCK’s crucial role in the COVID-19 response efforts in the United States and abroad through the distribution of COVID-19 vaccines, ancillary supply kits and COVID-19 tests is impressive.
Downsides
Weak Trends: McKesson distributes generic pharmaceuticals, which are subject to price fluctuation. The Distribution Solutions segment had experienced weaker generic pharmaceutical pricing trends, which continue to persist. Continued volatility, unfavorable pricing trends, reimbursement of generic drugs, significant fluctuations in the nature, frequency and magnitude of generic pharmaceutical launches could have a material adverse impact on McKesson.
Stiff Competition: Distribution Solutions faces stiff competition both in terms of price and service from various full-line, short-line and specialty wholesalers, service merchandisers, self-warehousing chains, manufacturers engaged in direct distribution, third-party logistics companies and large-payer organizations. Moreover, McKesson depends on fewer suppliers for its products. As a result, it is not in a position to negotiate pricing.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp, Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .
LabCorp, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $6.82, which beat the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the consensus mark by 13.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.73%.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank of 2.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO's earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN's earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%.