Reasons to Add McKesson Stock to Your Portfolio Right Now

Core Viewpoint - McKesson Corporation is positioned for growth due to its strong Biologics business and improving healthcare demand, despite facing competition and weaker pricing trends in the generic pharmaceutical sector [1][3]. Company Performance - McKesson's shares have increased by 25.6% over the past year, outperforming the industry growth of 3.5% and the S&P 500's gain of 28.3% [1]. - The company has a market capitalization of $72.36 billion and projects a growth rate of 14.1% over the next five years [2]. - McKesson's earnings have surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 4.99% [2]. Growth Drivers - There is an improving demand for healthcare, particularly in surgeries, which is benefiting McKesson's volumes and sales [3]. - The distribution business is expected to benefit from higher volumes of specialty products and increased demand for extended and primary care [4]. - McKesson is actively pursuing acquisitions and strategic collaborations to drive growth, including a recent agreement to acquire a controlling interest in Core Ventures [5] and a collaboration with Datavant to enhance data accessibility [6]. Financial Performance - McKesson reported significant revenue growth in the second quarter, driven by the U.S. Pharmaceutical segment and increased prescription volumes [8]. - The international segment also saw revenue increases due to higher pharmaceutical distribution volumes in Canada [9]. - The company raised its adjusted earnings per share (EPS) guidance for fiscal 2025 to a range of$ 32.40- $33.00, indicating an 18-20% growth from the previous year [10]. Challenges - McKesson faced headwinds in fiscal Q2, including a 50 basis point contraction in gross margin and a decline in operating margin [11][12]. - The company is experiencing stiff competition in its Distribution Solutions segment, which affects pricing negotiations due to reliance on fewer suppliers [13]. Estimate Trends - There has been a positive estimate revision trend for McKesson, with the Zacks Consensus Estimate for EPS moving up by 0.6% to$ 32.73 [14]. - The consensus estimate for third-quarter fiscal 2025 revenues is projected at $95.46 billion, reflecting an 18% improvement year-over-year [14].