Auriga Downgrades McKesson (MCK) to Hold; Drilling Down...Strong Q4 From Stock Buybacks

Auriga downgraded McKesson (NYSE: MCK) from Buy to Hold with a price target raised to $98.00.

Analyst, Gene Mannheimer, said, "We are downgrading shares of McKesson following strong Q4 results and an upbeat FY13 outlook. Drilling down, we note an aggressive share repurchase program driving $0.22 of EPS. We are raising our FY13 estimates while introducing FY14 estimates. The estimate raise drives our price target to $98, from $95, though not enough to justify a BUY at current valuation. Management indicated that FY13 will be a record year for oral generic launches, benefitting profit in Distribution Solutions albeit no to modestly negative growth in direct revenues. We have some skepticism over the longer term profitability of certain generics beyond their exclusivity period (e.g. atorvastatin), and the back-end loaded nature of Technology Solutions, as we expect customer attrition as some clients move in the direction of Epic and Cerner (Nasdaq: CERN)(BUY)."

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 $91.41 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• ATB Capital Markets Downgrades The Westaim Corp. (WED:CN) (WEDXF) to Speculative Buy (2)
• Jefferies Downgrades Aegis Vopak Terminals (AEGISVOP:IN) to Hold
• Nomura/Instinet Downgrades Indraprastha Gas Ltd. (IGL:IN) to Neutral