McKesson Corporation’s latest quarterly report presented a nuanced picture for investors. While the healthcare distribution giant comfortably surpassed earnings expectations, other financial metrics and notable shareholder activity painted a more complex story. Trading opened at $806.86, showing a slight decline of 0.4% on the day, prompting questions about the durability of the stock’s recent performance.
Earnings and Financial Highlights
The company reported earnings per share (EPS) of $9.86, exceeding the consensus estimate of $8.84 by a significant $1.02. Revenue saw a year-over-year increase of 10.2%, reaching $103.15 billion, though this figure came in just below the narrower consensus target of $103.80 billion. McKesson’s net margin was reported at 1.04%. A notable point of concern was the company’s reported return on equity, which stood at a deeply negative -248.14%.
Shareholders will receive a quarterly dividend of $0.82 per share, which annualizes to a payout of $3.28.
Institutional and Insider Trading Activity
Significant repositioning was observed among major institutional holders. Union Bancaire Privée slashed its stake by 70.8% in the third quarter, bringing its holding to 3,264 shares valued at approximately $2.38 million. Similarly, Thrivent Financial reduced its position by 13.4% in the second quarter to 16,117 shares, worth around $11.76 million.
Conversely, several institutions established or increased their investments. Montecito Bank & Trust initiated a new position by acquiring 1,915 shares (approx. $1.48 million), while Sanders Morris Harris took a stake valued at about $2.603 million. Graves Light Lenhart boosted its existing holding by 13.7%, bringing its total to 1,059 shares worth roughly $818,000. Collectively, institutional investors control approximately 85.07% of the company’s shares.
On the insider trading front, Chief Accounting Officer Napoleon B. Rutledge Jr. sold 329 shares on November 7 at an average price of $861.63. This transaction, totaling $283,476, reduced his direct holdings by 50.08%, leaving him with 328 shares.
Should investors sell immediately? Or is it worth buying McKesson?
Analyst Consensus and Price Targets
Market analysts have responded with a generally bullish outlook, reflected in several upward revisions to price targets. Morgan Stanley raised its target from $857 to $916, maintaining an “Overweight” rating. UBS set a target of $980, and Robert W. Baird lifted its target to $927. Citigroup increased its target from $820 to $860, reiterating a “Buy” recommendation. The consensus rating among analysts is “Moderate Buy,” with an average 12-month price target of $892.86.
Technical Analysis Perspective
A review of the technical indicators reveals mixed signals across different time horizons. Short-term algorithmic analysis suggests positive momentum, while the medium-term view indicates potential weakness. The long-term technical picture, however, remains robust.
Key technical levels are identified as follows:
* Short-term: Support at $810.52 / Resistance at $825.84
* Medium-term: Support at $785.75 / Resistance at $819.30
* Long-term: Support at $816.89 / Resistance at $872.69
The stock is currently trading relative to its 50-day moving average of $824.06 and its 200-day moving average of $750.38. Over the past 52 weeks, shares have traded between $558.36 and $895.58.
Near-Term Outlook
The solid quarterly earnings and subsequent analyst upgrades provide fundamental support for the equity. In the immediate future, the stock’s ability to hold the short-term support level near $810.50 will be crucial for maintaining positive momentum. A breach below the more significant medium-term support at $785.75 would notably weaken the technical outlook. Analyst sentiment and the high level of institutional ownership remain key factors for investors to monitor.
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