Auriga Reiterates a 'Buy' on McKesson (MCK); Another Strong Q: Should Only Get Better

Auriga reiterates a 'Buy' on McKesson (NYSE: MCK) price target cut $1 to $95.

Auriga analyst says, "We are reiterating our rating on McKesson following a strong start to FY12 in which results edged out expectations. Strength in Technology Solutions -- specifically faster than expected implementations leading to quicker revenue recognition, led the upside and the quarter was aided also by a 100bps tax rate reduction. Additionally, the U.S. Oncology (Nasdaq: USON) acquisition was a contributor. A strong generic launch calendar late in the year should lead to another strong back half. Despite the guidance raise and our increasing estimates, our new target of $95 (from $96) moves down a notch due to very modest multiple compression in the drug distribution group (namely from 14x to 13.5x)."

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

Shares of McKesson closed at $81.12 yesterday.

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