# McKesson (MCK.US)

Canonical: https://gigainvestors.com/s/MCK

Analysis as of: 2026-10-16T07:30:06.877Z. Financial observations: FY1997–FY2027.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $998.64 per share; close as of 2026-10-15.

Estimated value: low $374.38 per share, central $426.00 per share, high $494.71 per share. Buy at or below the central value $426.00 per share. Valuation as of 2026-10-16T07:30:06.877Z; scenarios are not confidence intervals.

Expected annual return: 5.9% at the stated quote. About 5.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 1

- Operating margin variation: 0.13×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.01×

- FY2019: 0.01×

- FY2020: 0.01×

- FY2021: 0.01×

- FY2022: 0.01×

- FY2023: 0.02×

- FY2024: 0.01×

- FY2025: 0.01×

- FY2026: 0.02×

- LTM to Jun 2026: 0.02×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 65.8%

- ROIC, second-lowest year: 34.6%

- Typical minus recent gross margin: 0.9 pp

- Typical gross margin (annual median): 4.5%

- Recent gross margin (lower of latest and 3-year median): 3.6%

- Years with nonpositive capital: 7

- Capital spending / revenue: 0.2%

- ROIC including acquisitions, ten-year median: 26.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 71.5%

- FY2019: 59.7%

- FY2020: >100%

- FY2021: 29.5%

- FY2022: 34.6%

- FY2023: 65.9%

- FY2024: 60.4%

- FY2025: 65.7%

- FY2026: 82.4%

- LTM to Jun 2026: 73.2%

### economics: pass

- Owner earnings / net income, 5-yr: 1.02×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $16B

- Net income, five-year total: $16B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.4 pp

- Working capital / revenue, change between three-year averages: -2.6 pp

- Working capital / revenue, final three-year average: -1.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.20×

- FY2023: 1.01×

- FY2024: 1.00×

- FY2025: 1.00×

- FY2026: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 59.7% vs 65.7%

- Per-share earnings: 9.69 to 25.72 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -6.1%

- Ordinary dilution, 5-year annual growth: -5.0%

- Market cap gain: $74B

- Cumulative retained earnings: $9.1B

- Diluted shares, 10-year annual growth: -6.1%

- Diluted shares, 5-year annual growth: -5.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 13.0%

- Per-share value change: $16.03

- Per-share value, starting three-year median: $9.69

- Per-share value, ending three-year median: $25.72

- Buybacks concentrated in cheaper years (correlation): 0.13

- Average buyback yield: 5.7%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $6.9B

- Cumulative net income, 10 years: $17B

- ROIC, first three-year median: 59.7%

- ROIC, last three-year median: 65.7%

Chart: Earnings per share; fiscal year observations.

- FY2017: $23.24

- FY2018: $0.32

- FY2019: $0.17

- FY2020: $4.96

- FY2021: -$28.26

- FY2022: $7.23

- FY2023: $25.04

- FY2024: $22.39

- FY2025: $25.72

- FY2026: $38.37

### accounting: pass

- Sloan accruals: -1.7%

- Receivables to sales index (DSRI): 0.97×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.29×

- Accounting red flags: 0

Chart: Sloan accruals; fiscal year observations.

- FY2017: 0.7%

- FY2018: -7.1%

- FY2019: -6.7%

- FY2020: -5.7%

- FY2021: -14.0%

- FY2022: -5.2%

- FY2023: -2.6%

- FY2024: -1.9%

- FY2025: -3.7%

- FY2026: -1.7%

## Holders

- [Stephen Mandel](https://gigainvestors.com/LPC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Ron Muhlenkamp](https://gigainvestors.com/MUHL): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 11.6% a year for ten years · "McKesson Raises FY27 Guidance as Oncology and GLP-1 Growth Accelerate" (finance.yahoo.com, Aug 2026) · sales +1.9%

Story as of 2026-10-16T09:59:08.320Z; price observation 2026-10-15.

Price needs cash profits to grow 11.6% a year for ten years

- 2025-06-11: McKesson Boosts Fiscal 2026 EPS Guidance on Operational Strength, Morgan Stanley Says ([finance.yahoo.com](https://finance.yahoo.com/news/mckesson-boosts-fiscal-2026-eps-153949960.html))

- 2025-09-23: McKesson raises profit guidance and long-term growth targets at Investor Day ([finance.yahoo.com](https://finance.yahoo.com/news/mckesson-raises-profit-guidance-long-141619526.html))

- 2025-11-05: McKesson raises annual profit forecast on robust demand for specialty drugs ([finance.yahoo.com](https://finance.yahoo.com/news/mckesson-raises-annual-profit-forecast-221140390.html))

- 2026-02-05: McKesson Earnings Beat Highlights Oncology Growth And Medical Surgical Separation Plans ([finance.yahoo.com](https://finance.yahoo.com/news/mckesson-earnings-beat-highlights-oncology-161149743.html))

- 2026-05-08: MCK Stock Falls Despite Q4 Earnings Beat, Sales Miss, Margins Up ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/mck-stock-falls-despite-q4-144700194.html))

- 2026-08-24: McKesson Raises FY27 Guidance as Oncology and GLP-1 Growth Accelerate ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/mckesson-raises-fy27-guidance-oncology-184900864.html))

### Sales · FY2026–2027

sales +1.9%; source https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm; observed 2026-05-08.

- FY2018: $208B 

- FY2019: $214B 

- FY2020: $231B 

- FY2021: $238B 

- FY2022: $264B 

- FY2023: $277B 

- FY2024: $309B 

- FY2025: $359B 

- FY2026: $403B 

- FY2027: $411B 

### Gross margin · FY2027

gross margin 3.6%; source https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm; observed 2026-05-08.

- FY2018: 5.0% 

- FY2019: 5.0% 

- FY2020: 4.9% 

- FY2021: 4.9% 

- FY2022: 4.8% 

- FY2023: 4.3% 

- FY2024: 3.9% 

- FY2025: 3.5% 

- FY2026: 3.6% 

- FY2027: 3.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in medical distribution; annual sales are USD 403.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm (filed 2026-05-08); FY2026: revenue 403430000000; grossProfit 14550000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MCK.US: McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and Medical-Surgical Solutions. The company distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products; delivers products to retail pharmacies, hospitals, long-term care centers, clinics, and institutions; and provides logistics and distribution services for manufacturers. It also provides consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies; gene therapy with InspiroGene, practice consulting, and vaccine distribution services; and technology solutions, as well as research, insights, technologies, and services to improve cancer and specialty care. In addition, the company helps in solving medication access, affordability, and adherence challenges for patients by working across healthcare to connect patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies. Further, it offers technology services, which includes electronic prior authorization, prescription price transparency, benefit insight, dispensing support services, patient enrollment, third-party logistics, and wholesale distribution support; medical-surgical supplies, laboratory equipment, pharmaceutical distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, hospital reference labs, nursing homes, hospice and home health care agencies, government facilities, and online marketplaces and retailers. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.

### Why customers stay

Margins ranged from 3.5% to 3.9% during 2024–26; it earns 65.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2024: grossProfit / revenue = 3.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2025: grossProfit / revenue = 3.5%.

- Source: https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm (filed 2026-05-08); FY2026: grossProfit / revenue = 3.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); 10-year return on capital observations [[2018,0.7145303326810176],[2019,0.5972238805970149],[2020,2.6517069692382753],[2021,0.2954923273657289],[2022,0.34625217507696426],[2023,0.6588078691108169],[2024,0.6043718496121604],[2025,0.6567685307600701],[2026,0.8238184635471311],[2027,0.731919950917269]]; median 0.6577881999354436. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 5% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm (filed 2026-05-08); Gross margin observations: [[2021,0.04861729099853922],[2022,0.04791905018070509],[2023,0.04289312676402456]]; range within 2 percentage points.

### Where the cash goes

Spends 0.3% of cash earnings on expansion; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2017: growth capex 0; upkeep 562000000; owner earnings 5531000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2018: growth capex 0; upkeep 580000000; owner earnings 438000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2019: growth capex 0; upkeep 557000000; owner earnings 426000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2020: growth capex 0; upkeep 506000000; owner earnings 1316000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2022: growth capex 0; upkeep 535000000; owner earnings 1339000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2023: growth capex 0; upkeep 558000000; owner earnings 3610000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2024: growth capex 52000000; upkeep 635000000; owner earnings 3002000000. Growth capex / owner earnings = 0.017321785476349102.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); FY2025: growth capex 223000000; upkeep 636000000; owner earnings 3295000000. Growth capex / owner earnings = 0.06767830045523521.

- Source: https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm (filed 2026-05-08); FY2026: growth capex 16000000; upkeep 729000000; owner earnings 4762000000. Growth capex / owner earnings = 0.0033599328013439733.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); Dividend observations: [[2017,253000000],[2018,262000000],[2019,292000000],[2020,294000000],[2021,276000000],[2022,277000000],[2023,292000000],[2024,314000000],[2025,345000000],[2026,381000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm (filed 2026-05-08); FY2026: cash repurchases 4750000000 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MCK.US SharesStats.PercentInsiders = 0.055 percentage points; cache date 2026-10-16.

### What could break it

"We might lose our ability to purchase, store, or distribute pharmaceuticals" (SEC filing, May 2026)

- Source: https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm (filed 2026-05-08); We might lose our ability to purchase, store, or distribute pharmaceuticals

### What the price says

The price assumes cash profits grow 11.6% yearly over ten years; actual growth was 13.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-08); Ten-year compound average after fade. Initial solved rate 0.15464180424798413. Price 998.64; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 10.583690987124463 → FY2026 38.372280419016924. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $127.17 per share

- 2016-11: $143.81 per share

- 2016-12: $140.45 per share

- 2017-01: $139.15 per share

- 2017-02: $150.13 per share

- 2017-03: $148.26 per share

- 2017-04: $138.29 per share

- 2017-05: $163.09 per share

- 2017-06: $164.54 per share

- 2017-07: $161.87 per share

- 2017-08: $149.31 per share

- 2017-09: $153.61 per share

- 2017-10: $137.88 per share

- 2017-11: $147.74 per share

- 2017-12: $155.95 per share

- 2018-01: $168.88 per share

- 2018-02: $149.23 per share

- 2018-03: $140.87 per share

- 2018-04: $156.21 per share

- 2018-05: $141.94 per share

- 2018-06: $133.40 per share

- 2018-07: $125.60 per share

- 2018-08: $128.75 per share

- 2018-09: $132.65 per share

- 2018-10: $124.76 per share

- 2018-11: $124.50 per share

- 2018-12: $110.47 per share

- 2019-01: $128.25 per share

- 2019-02: $127.16 per share

- 2019-03: $117.06 per share

- 2019-04: $119.25 per share

- 2019-05: $122.14 per share

- 2019-06: $134.39 per share

- 2019-07: $138.95 per share

- 2019-08: $138.27 per share

- 2019-09: $136.66 per share

- 2019-10: $133.00 per share

- 2019-11: $144.64 per share

- 2019-12: $138.32 per share

- 2020-01: $142.61 per share

- 2020-02: $139.86 per share

- 2020-03: $135.26 per share

- 2020-04: $141.25 per share

- 2020-05: $158.67 per share

- 2020-06: $153.42 per share

- 2020-07: $150.16 per share

- 2020-08: $153.44 per share

- 2020-09: $148.93 per share

- 2020-10: $147.49 per share

- 2020-11: $179.91 per share

- 2020-12: $173.92 per share

- 2021-01: $174.47 per share

- 2021-02: $169.52 per share

- 2021-03: $195.04 per share

- 2021-04: $187.56 per share

- 2021-05: $192.39 per share

- 2021-06: $191.24 per share

- 2021-07: $203.83 per share

- 2021-08: $204.14 per share

- 2021-09: $199.38 per share

- 2021-10: $207.88 per share

- 2021-11: $216.76 per share

- 2021-12: $248.57 per share

- 2022-01: $256.72 per share

- 2022-02: $274.96 per share

- 2022-03: $306.13 per share

- 2022-04: $309.61 per share

- 2022-05: $328.69 per share

- 2022-06: $326.21 per share

- 2022-07: $341.58 per share

- 2022-08: $367.00 per share

- 2022-09: $339.87 per share

- 2022-10: $389.37 per share

- 2022-11: $381.68 per share

- 2022-12: $375.12 per share

- 2023-01: $378.68 per share

- 2023-02: $349.81 per share

- 2023-03: $356.05 per share

- 2023-04: $364.24 per share

- 2023-05: $390.84 per share

- 2023-06: $427.31 per share

- 2023-07: $402.40 per share

- 2023-08: $412.32 per share

- 2023-09: $434.85 per share

- 2023-10: $455.36 per share

- 2023-11: $470.56 per share

- 2023-12: $462.98 per share

- 2024-01: $499.89 per share

- 2024-02: $521.41 per share

- 2024-03: $536.85 per share

- 2024-04: $537.21 per share

- 2024-05: $569.59 per share

- 2024-06: $584.04 per share

- 2024-07: $617.02 per share

- 2024-08: $561.08 per share

- 2024-09: $494.42 per share

- 2024-10: $500.59 per share

- 2024-11: $628.50 per share

- 2024-12: $569.91 per share

- 2025-01: $594.75 per share

- 2025-02: $640.26 per share

- 2025-03: $672.99 per share

- 2025-04: $712.79 per share

- 2025-05: $719.51 per share

- 2025-06: $732.78 per share

- 2025-07: $693.54 per share

- 2025-08: $686.64 per share

- 2025-09: $772.54 per share

- 2025-10: $811.34 per share

- 2025-11: $881.12 per share

- 2025-12: $820.29 per share

- 2026-01: $831.21 per share

- 2026-02: $987.37 per share

- 2026-03: $865.36 per share

- 2026-04: $815.20 per share

- 2026-05: $742.44 per share

- 2026-06: $755.60 per share

- 2026-07: $856.19 per share

- 2026-08: $885.32 per share

- 2026-09: $853.81 per share

- 2026-10: $961.88 per share

## Annual estimated value (USD per share)

- FY2017: low $121.03 per share, central $137.71 per share, high $159.93 per share

- FY2018: low $122.90 per share, central $139.84 per share, high $162.40 per share

- FY2019: low $129.18 per share, central $146.99 per share, high $170.70 per share

- FY2020: low $79.21 per share, central $90.13 per share, high $104.67 per share

- FY2021: low $34.08 per share, central $38.78 per share, high $45.04 per share

- FY2022: low $39.36 per share, central $44.79 per share, high $52.01 per share

- FY2023: low $107.89 per share, central $122.77 per share, high $142.57 per share

- FY2024: low $143.43 per share, central $163.21 per share, high $189.53 per share

- FY2025: low $281.15 per share, central $319.91 per share, high $371.52 per share

- FY2026: low $345.26 per share, central $392.86 per share, high $456.24 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:35:51.428Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/927653/000092765326000069/mck-20260331.htm); period 2026-03-31, filed 2026-05-08.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.