A month has gone by since the last earnings report for McKesson (MCK Quick QuoteMCK - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is McKesson due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for McKesson Corporation before we dive into how investors and analysts have reacted as of late.

MCK Q1 Earnings Beat on Specialty Growth, Guidance Raised

McKessonreported first-quarter fiscal 2027 adjusted earnings per share (EPS) of $9.93, up 20% year over year. The figure beat the Zacks Consensus Estimate of $9.44 by 5.2%, driven by strong operational growth in North American Pharmaceutical and Oncology & Multispecialty, along with a lower share count.

GAAP EPS was $5.15 in the first quarter of fiscal 2027, down 18% from $6.25 in the year-ago quarter. The decline primarily reflected a $293 million redemption value adjustment related to redeemable noncontrolling interests in the Medical-Surgical Solutions segment. This impact was partly offset by organic growth across the enterprise and the absence of the prior-year $189 million pre-tax bad-debt provision tied to the Rite Aid bankruptcy.

MCK's Revenue Details

Revenues rose 8% to $105.38 billion and surpassed the consensus estimate of $104.39 billion by 1%. GLP-1 medication distribution revenues increased 24% year over year to $15 billion.

The top line benefited from higher prescription volumes in North American Pharmaceutical and continued strength in oncology and multispecialty. Growth in specialty products and provider solutions also supported the quarterly performance.

These gains were partially offset by lower branded pharmaceutical pricing following wholesale acquisition cost reductions in January 2026 and branded-to-generic conversions. Management noted that the decline in branded pricing affected revenues but did not have a meaningful impact on operating profit.

McKesson's Q1 Segmental Analysis

Revenues from the North American Pharmaceutical segment increased 5% year over year to $86.77 billion. Growth reflected higher prescription transaction volumes, including increased specialty product volumes, partly offset by lower contributions from branded pharmaceuticals.

Adjusted segment operating profit climbed 19% to $894 million. The improvement was driven by specialty product distribution to health systems and strategic accounts, as well as the timing of new product launches.

Oncology & Multispecialty revenues surged 33% to $14.22 billion, supported by growth in provider solutions and specialty distribution, including contributions from acquisition. Excluding Core Ventures, revenues increased approximately 24%.

Adjusted segment operating profit jumped 41% to $405 million. Excluding Core Ventures, operating profit grew approximately 15%, aided by higher specialty distribution volumes and organic and new business growth in provider solutions.

Prescription Technology Solutions revenues rose 9% to $1.57 billion, reflecting higher prescription volumes in third-party logistics and access solutions. Adjusted operating profit advanced 13% to $303 million on higher demand for access solutions, including prior authorization services.

Medical-Surgical Solutions revenues increased 4% to $2.82 billion, driven by growth across alternate sites of care and higher specialty pharmaceutical volumes. Adjusted operating profit declined 20% to $195 million due to product mix and one-time administrative expenses, partly offset by contributions from the extended care channel.

MCK's Margin

Adjusted gross profit increased 13% year over year to $3.68 billion. The adjusted gross margin expanded approximately 15 basis points to 3.49%, reflecting growth in North American Pharmaceutical and Oncology & Multispecialty.

Adjusted operating profit rose 16% to $1.65 billion. The adjusted operating margin improved roughly 11 basis points to 1.57%, as gross profit growth outpaced the 10% increase in adjusted operating expenses.

McKesson's Financial Update

McKesson ended the quarter with $5.16 billion in cash and cash equivalents, up from $3.98 billion at the end of fiscal 2026. Total liquidity was approximately $10 billion.

Cumulative net cash provided by operating activities was $6.16 billion against cumulative net cash used in operating activities of $6.09 billion in the year-earlier period. The capital expenditures totaled $152 million. This resulted in negative free cash flow of $372 million, although trailing 12-month free cash flow remained approximately $6.1 billion.

The company returned $2.6 billion to shareholders, including $2.5 billion through share repurchases and $102 million in dividends. Its board also approved a 15% quarterly dividend increase to 94 cents per share.

MCK Raises Fiscal 2027 Guidance

McKesson raised its fiscal 2027 adjusted earnings guidance to $44.20-$45.00 per share from the previous projection of $43.80-$44.60. The revised outlook implies growth of 13-15%.

The company continues to expect revenue growth of 5-9% and operating profit growth of 9-13%. North American Pharmaceutical operating profit growth is now anticipated at the high end of the prior 5.5-9.5% range.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, McKesson has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, McKesson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

McKesson is part of the Zacks Medical - Dental Supplies industry. Over the past month, Merit Medical (MMSI Quick QuoteMMSI - Free Report) , a stock from the same industry, has gained 1%. The company reported its results for the quarter ended June 2026 more than a month ago.

Merit Medical reported revenues of $418.84 million in the last reported quarter, representing a year-over-year change of +9.5%. EPS of $1.19 for the same period compares with $1.01 a year ago.

Merit Medical is expected to post earnings of $1.04 per share for the current quarter, representing a year-over-year change of +13%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Merit Medical has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.