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McKesson (MCK) Gains But Lags Market: What You Should Know

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McKesson (MCK) closed at $307.68 in the latest trading session, marking a +0.38% move from the prior day. This move lagged the S&P 500's daily gain of 1.46%. At the same time, the Dow added 1%, and the tech-heavy Nasdaq lost 0.18%.

Coming into today, shares of the prescription drug distributor had lost 8% in the past month. In that same time, the Medical sector lost 3.17%, while the S&P 500 lost 6.94%.

Investors will be hoping for strength from McKesson as it approaches its next earnings release. On that day, McKesson is projected to report earnings of $5.29 per share, which would represent a year-over-year decline of 4.86%. Our most recent consensus estimate is calling for quarterly revenue of $63.87 billion, up 1.91% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $23.25 per share and revenue of $264.78 billion, which would represent changes of -1.86% and +0.31%, 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.23% higher within the past month. McKesson is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, McKesson is holding a Forward P/E ratio of 13.18. This represents a discount compared to its industry's average Forward P/E of 18.08.

Investors should also note that MCK has a PEG ratio of 1.4 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MCK's industry had an average PEG ratio of 2.14 as of yesterday's close.

The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 19% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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