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McKesson (MCK) Gains As Market Dips: What You Should Know

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In the latest trading session, McKesson (MCK - Free Report) closed at $246.97, marking a +0.55% move from the previous day. This change outpaced the S&P 500's 0.15% loss on the day. At the same time, the Dow lost 0.38%, and the tech-heavy Nasdaq lost 0.05%.

Heading into today, shares of the prescription drug distributor had lost 0.35% over the past month, outpacing the Medical sector's loss of 11.91% and the S&P 500's loss of 7.66% in that time.

Investors will be hoping for strength from McKesson as it approaches its next earnings release, which is expected to be February 2, 2022. In that report, analysts expect McKesson to post earnings of $5.38 per share. This would mark year-over-year growth of 16.96%. Our most recent consensus estimate is calling for quarterly revenue of $66.13 billion, up 5.64% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $22.74 per share and revenue of $259.83 billion, which would represent changes of +32.13% and +9.07%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for McKesson. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.49% higher. McKesson currently has a Zacks Rank of #3 (Hold).

In terms of valuation, McKesson is currently trading at a Forward P/E ratio of 10.8. This represents a discount compared to its industry's average Forward P/E of 18.74.

Investors should also note that MCK has a PEG ratio of 0.94 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Medical - Dental Supplies stocks are, on average, holding a PEG ratio of 1.54 based on yesterday's closing prices.

The Medical - Dental Supplies industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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