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McKesson (MCK) Stock Slides as Market Rises: Facts to Know Before You Trade

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In the latest close session, McKesson (MCK - Free Report) was down 2.72% at $738.06. The stock's performance was behind the S&P 500's daily gain of 0.01%. On the other hand, the Dow registered a gain of 0.51%, and the technology-centric Nasdaq decreased by 0.28%.

Prior to today's trading, shares of the prescription drug distributor had gained 9.73% outpaced the Medical sector's gain of 4.67% and the S&P 500's gain of 4.83%.

The upcoming earnings release of McKesson will be of great interest to investors. The company is predicted to post an EPS of $8.84, indicating a 25.04% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $103.68 billion, indicating a 10.71% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates project earnings of $37.94 per share and a revenue of $408.11 billion, demonstrating changes of +14.8% and +13.66%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for McKesson. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 2.95% upward. McKesson is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, McKesson is holding a Forward P/E ratio of 20. Its industry sports an average Forward P/E of 14.11, so one might conclude that McKesson is trading at a premium comparatively.

Meanwhile, MCK's PEG ratio is currently 1.37. 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. The Medical - Dental Supplies industry currently had an average PEG ratio of 1.59 as of yesterday's close.

The Medical - Dental Supplies industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 63, placing it within the top 26% of over 250 industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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