UBS Maintains a 'Buy' on McKesson (MCK); Q4 Earnings Preview

UBS maintains a 'Buy' on McKesson (NYSE: MCK), raises PT from $89 to $95.

UBS analyst says, "MCK is expected to report F4Q11 EPS after the close on Tuesday. Our $1.60 EPS estimate is in line with consensus. While there is potential for drug distribution upside, the HCIT segment is the more difficult segment to predict, in our view (we project 55% EBIT growth). This is due to the large ramp in EBIT suggested by mgmt, offset by commentary at the HIMSS conference about salesforce layoffs."

"We are projecting ‘distribution solutions’ EBIT of $649 mil, or 15% growth y-o-y when adjusting for M&A and flu. This is slightly below the 17% and 18% organic distribution EBIT growth reported last week by AmerisourceBergen (NYSE: ABC) and Cardinal Health (NYSE: CAH), respectively. So we see room for upside relative to peers in the MCK distribution operations."

For more ratings news on McKesson click here and for the rating history of McKesson click here.

Shares of McKesson closed at $84.21 yesterday.

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