Leerink Partners Downgrades McKesson (MCK) to Market Perform

October 28, 2016 7:08 AM EDT
Get Alerts MCK Hot Sheet
Price: $146.25 +2.03%

Rating Summary:
    10 Buy, 13 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 21 | Down: 36 | New: 11
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Leerink Partners downgraded McKesson (NYSE: MCK) from Outperform to Market Perform with a price target of $160.00.

Analyst David Larsen commented, "MCK reported F2Q:17 adjusted EPS of $2.94 (-11% y/y) which was well below Leerink/Consensus of $3.10/$3.04. Management also reduced F2017 EPS guidance by $1.08 at the midpoint. We are downgrading the stock to Market Perform due to deteriorating fundamentals, including: (1) a significant slowdown in brand inflation, (2) far less generic inflation, (3) a slowdown in the value of generic launches, (4) a more competitive pricing environment, (5) a business model where manufacturers are demanding more economics, (6) company specific headwinds such as RAD, and (7) a lack of transparency on earnings. Given all of these challenges we believe the stock deserves to trade at a "low-teens" multiple at best, and we believe the days of hyper-inflation beats and raises are over. We downgrade MCK to MP."

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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