Deutsche Bank Downgrades McKesson (MCK) to Hold

Deutsche Bank downgraded McKesson (NYSE: MCK) from Buy to Hold with a price target of $153.00 (from $196.00). Analyst George Hill expressed fears of a price war in drug wholesaling.

"MCK reported F2Q results below consensus, but it was the company's outlook and commentary that drive our ratings change. MCK reported F2Q EPS of $2.94 (-7%), below the Street's $3.04. The company lowered its F17 guidance range by $1.10 to $12.35-$12.85, which will now likely be down vs F16. We had recently cut our numbers citing the risks from slower brand drug price inflation, but MCK noted increased sell side margin pressure was more to blame. While we hate downgrading a stock on a miss/steep decline, we do not believe this was the clearing event necessary to create a bottom for MCK shares and move to Hold on valuation and a lack of earnings visibility," said Hill.

For an analyst ratings summary and ratings history on McKesson click here. For more ratings news on McKesson click here.

Shares of McKesson closed at $160.50 yesterday.

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