Mckesson Corp

MCK

Wholesale-Drugs, Proprietaries & Druggists' Sundries

Mkt Cap

$73.15B

PE

24.37

Debt

$5.679B

Cash

$4.585B

EV

$74.25B

FCF

$3.627B

Market Cap

$73.15B

P/E Ratio

24.37

Debt

$5.679B

Cash

$4.585B

EV

$74.25B

FCF

$3.627B

Charts data: {"Earnings":[{"time":"2015-03-30","value":1476000000},{"time":"2016-03-30","value":2258000000},{"time":"2017-03-30","value":5070000000},{"time":"2018-03-30","value":67000000},{"time":"2019-03-30","value":34000000},{"time":"2020-03-30","value":900000000},{"time":"2021-03-30","value":-4539000000},{"time":"2022-03-30","value":1114000000},{"time":"2023-03-30","value":3560000000},{"time":"2024-03-30","value":3002000000}],"Sales":[{"time":"2015-03-30","value":179045000000},{"time":"2016-03-30","value":190884000000},{"time":"2017-03-30","value":198533000000},{"time":"2018-03-30","value":208357000000},{"time":"2019-03-30","value":214319000000},{"time":"2020-03-30","value":231051000000},{"time":"2021-03-30","value":238228000000},{"time":"2022-03-30","value":263966000000},{"time":"2023-03-30","value":276711000000},{"time":"2024-03-30","value":308951000000}],"Net Margins":[{"time":"2015-03-30","value":0.008243737607863944},{"time":"2016-03-30","value":0.011829173739024748},{"time":"2017-03-30","value":0.025537316214432865},{"time":"2018-03-30","value":0.00032156347038976373},{"time":"2019-03-30","value":0.00015864202427222972},{"time":"2020-03-30","value":0.003895243907189322},{"time":"2021-03-30","value":-0.019053175949090787},{"time":"2022-03-30","value":0.0042202404855170746},{"time":"2023-03-30","value":0.01286540831408943},{"time":"2024-03-30","value":0.009716751200028484}],"Assets":[{"time":"2015-03-30","value":53870000000},{"time":"2016-03-30","value":56563000000},{"time":"2017-03-30","value":60969000000},{"time":"2018-03-30","value":60381000000},{"time":"2019-03-30","value":59672000000},{"time":"2020-03-30","value":61247000000},{"time":"2021-03-30","value":65015000000},{"time":"2022-03-30","value":63298000000},{"time":"2023-03-30","value":62320000000},{"time":"2024-03-30","value":67443000000}],"Stockholders Equity":[{"time":"2015-03-30","value":8085000000},{"time":"2016-03-30","value":9008000000},{"time":"2017-03-30","value":11273000000},{"time":"2018-03-30","value":10057000000},{"time":"2019-03-30","value":8287000000},{"time":"2020-03-30","value":5309000000},{"time":"2021-03-30","value":175000000},{"time":"2022-03-30","value":-1792000000},{"time":"2023-03-30","value":-1490000000},{"time":"2024-03-30","value":-1599000000}],"ROE":[{"time":"2015-03-30","value":0.18256029684601113},{"time":"2016-03-30","value":0.2506660746003552},{"time":"2017-03-30","value":0.4497471835358822},{"time":"2018-03-30","value":0.0066620264492393355},{"time":"2019-03-30","value":0.004102811632677688},{"time":"2020-03-30","value":0.1695234507440196},{"time":"2021-03-30","value":-25.937142857142856},{"time":"2022-03-30","value":-0.6216517857142857},{"time":"2023-03-30","value":-2.389261744966443},{"time":"2024-03-30","value":-1.8774233896185115}],"ROA":[{"time":"2015-03-30","value":0.05509560051976982},{"time":"2016-03-30","value":0.06267347912946626},{"time":"2017-03-30","value":0.11660023946595811},{"time":"2018-03-30","value":0.012619863864460675},{"time":"2019-03-30","value":0.01484783483040622},{"time":"2020-03-30","value":0.04063872516204875},{"time":"2021-03-30","value":-0.07742828578020457},{"time":"2022-03-30","value":0.03219690985497172},{"time":"2023-03-30","value":0.07429396662387676},{"time":"2024-03-30","value":0.05796005515768871}]}

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment offers distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-K
3/31/23
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12/31/22
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3/31/22
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12/31/20
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6/30/19
10-K
3/31/19
10-Q
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-K
3/31/18
10-Q
12/31/17

DCF

Discounted Cash Flow Valuation of Mckesson Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$3.627B	$3.72B	$3.816B	$3.914B	$4.014B	$4.117B	$4.223B	$4.331B	$4.442B	$4.556B	$4.673B	$46.73B
DCF		$3.235B	$2.885B	$2.573B	$2.295B	$2.047B	$1.826B	$1.628B	$1.452B	$1.295B	$1.155B	$11.55B
Value	$31.94B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 4.9%

Earnings Stability -23%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	03-2016	03-2017	03-2018	03-2019	03-2020	03-2021	03-2022	03-2023	03-2024	TTM
Net Margin	1.2%	2.6%	0.032%	0.016%	0.39%	-1.9%	0.42%	1.3%	0.97%	0.97%
ROA	6.3%	12%	1.3%	1.5%	4.1%	-7.7%	3.2%	7.4%	5.8%	5.8%
ROE	25%	45%	0.67%	0.41%	17%	-2.6K%	-62%	-240%	-190%	-190%

What is the average Net Margin?

The average Net Margin over the past 5 years is +0.2%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.28%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +2.38%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.22%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is -510.86%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +23.52%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	03-2016	03-2017	03-2018	03-2019	03-2020	03-2021	03-2022	03-2023	03-2024	TTM
Debt FCF	3.07	2.17	2.29	2.28	2.18	2.02	1.71	1.43	1.57	1.57
Debt Equity	1.08	0.84	0.90	0.96	1.59	45.09	-3.73	-4.40	-3.55	-3.55
MIN
Graham Stability	-	-	2.3%	1.4%	52%	-1.4K%	-	-	100%	-1.4K%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 1.57.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.18.

What is the Graham’s Stability?

Graham’s Stability measure stands at -13.60.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	03-2017	03-2019	03-2021	03-2023	Trend
Revenue	6.5%	7.6%	9.1%	12%	0.58%
Net Income	-7.2%	150%	-	-16%	27%
Stockholders Equity	-	-	-	-	-21%
FCF	-2.5%	0.84%	-2.4%	-21%	-2.9%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +7.59%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.58%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +145.01%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +26.97%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -20.88%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +0.84%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -2.9%.