MCK US S&P 500Russell 1000 Earnings call · transcribed from the recording
McKesson Corporation (MCK) · Q3 2026 results and valuation
Share price: $1079.79 · 2026-11-11
McKesson Corporation provides distribution and logistics services for pharmaceutical drugs, medical-surgical supplies, and laboratory equipment. The company serves customers such as pharmacies, healthcare providers, and government entities in the United States and Canada. Source: 10-K annual report (2026-05-08)
Results Q3 2026 vs Q2 2026 · previous quarter · fiscal Q2 2027 · published 4 Nov 2026 and 5 Aug 2026
Net income up 98.4% on the previous quarter. Management sounded very upbeat, though noticeably less so answering analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
+98.4%
Net income vs Q2 2026
Outlook given
Net income 1.22B vs 614.0M
Revenue +5.3%
Against the same quarter last year (Q3 2025) it is +9.7% — part of the move on last quarter is seasonal.
2 · How management spoke
Very upbeat
More upbeat than 93% of company calls
Answers to analysts: upbeat, but clearly less so than the script.
Last call it was different: the answers were more upbeat than the script.
3 · What stood out
Rising
Last month, McKesson signed a definitive agreement to make a strategic investment in Option Care Health.
Valuation
Is McKesson Corporation undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-03-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 13.4% growth a year (3-year revenue growth), the model's fair value is $1451.20 a share — the stock trades 26% below it. Today's price assumes 9.5% growth a year.
Current price
$1079.79
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+9.5% for 10 yrs
Fair value / share
$1451.20
Buy below
$1088.40
Price vs fair value
Undervalued 26%
Price vs buy-below price
Undervalued 1%
Read between the lines
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Guidance
McKesson anticipates the momentum will be supported by stable market trends, including growth in prescription volume, increasing demand for specialty and branded medications including GLP-1s and benefits from improved productivity...
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Guidance
McKesson anticipates the full year effective tax rate of 18 to 19%.
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Figure
McKesson announced that it has entered into a definitive agreement to invest approximately $1.4 billion for a 49% minority...
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Fading
McKesson had negative free cash flow of $372 million, including $152 million in capital expenditures as it continues to invest in distribution technology…
Source quote
“We had negative free cash flow of $372 million, including $152 million in capital expenditures as we continue to invest in distribution technology... We ended the quarter with $5.2 billion in cash and cash equivalents, and total liquidity of approximately $10 billion, which is well above the minimum threshold. Free cash flow improved meaningfully compared to the prior year, driven by efficient working capital...”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 85% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.
Sentences that drove the tone
“And I think it's just reflective of the great alignment and understanding of this team of how we need to show up every day for our customers, how we win...”
“Looking at the long term, we anticipate the growth to be driven by the strength of our leading platforms in oncology, multi-specialty, and biopharma solutions supported by operating leverage and...”
“Across this segment, we continue to see strong momentum reflecting our unwavering commitment to customers, the consistent delivery of high-quality service, and a disciplined focus on operational excellence.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 110.96B | 105.38B | +5.3% | 103.15B | +7.6% |
| Gross profit | 3.96B | 3.69B | +7.4% | 3.54B | +11.7% |
| Operating income | 1.60B | 1.32B | +21.6% | 1.41B | +14.0% |
| Net income | 1.22B | 614.0M | +98.4% | 1.11B | +9.7% |
| EPS | 10.44 | 5.15 | +102.7% | 8.92 | +17.0% |
| P/E today 27.4 | 22.0 | 20.3 | +1.7 | 24.1 | −2.1 |
Topics
Most discussed now
- New Its acquisition of precision Medicine Group, which McKesson closed this week.
- $45.60 to $46.60 and 40 cents from the previous range of 44 dollars and 20 cents to 45 dollars McKesson's...
- For its business, McKesson is raising its fiscal 2027 adjusted earnings per diluted share guidance to $45.60 to $46.60 and...
- These results demonstrate the strength and resilience of McKesson's operating model, the momentum across McKesson's diversified healthcare…
- When you parlay a strong, healthy, broad-based growth with continued operational excellence and productivity within its supply chain…
Faded since Q2 2026
- Fading Fundamentals in the business remain strong, supported by stable utilization trends, specialty growth, and the strength of McKesson's…
- Fading McKesson has a strong track record of investing behind growth, maintaining financial flexibility, and returning capital to shareholders.
- Fading Revenues were $86.8 billion an increase of 5%, driven by broad based growth from higher prescription volumes, including an increase...
- Fading Together, these actions advance separation readiness support the financial flexibility of Well-verse, and reinforce McKesson's focus on…
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
- Regulation FD disclosure · SEC 8-K
McKesson and CD&R will acquire Option Care Health for $32.05 per share, representing a total enterprise value of approximately $5.8 billion and a premium of approximately 37% over the October 5, 2026, closing price.
- Regulation FD disclosure · SEC 8-K
McKesson Corporation reported a cybersecurity incident on August 25, 2026, but has not determined the incident to be material or likely to have a material impact on its financial condition.
- Results of operations · SEC 8-K
McKesson Corporation reported preliminary results for the quarter ended June 30, 2026, on August 5, 2026.
- Shareholder vote results · SEC 8-K · routine
- Director or officer change; Regulation FD disclosure · SEC 8-K
Executive Vice President Thomas L. Rodgers will retire on August 1, 2026, and Ramesh Srinivasan was appointed to the role effective August 1, 2026.
- Material agreement; New financial obligation · SEC 8-K
McKesson Corporation's subsidiaries entered into an amendment to the Credit Agreement to provide for a $2,250.0 million senior secured term loan facility due 2032.
- Results of operations · SEC 8-K
McKesson Corporation reported preliminary results for the quarter and fiscal year ended March 31, 2026, on May 7, 2026.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-11.
Cash & runway
Cash & equivalents
$5.16B
2026-06-30
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: -5.0% YoY.
| Quarter | Shares |
|---|---|
| Q3 2024 | 128.7M |
| Q4 2024 | 126.0M |
| Q2 2025 | 124.9M |
| Q3 2025 | 124.0M |
| Q4 2025 | 123.2M |
| Q2 2026 | 118.7M |
Shares outstanding: 116.6M (2026-07-31)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 57 filings; 50 filings parsed.
Sold by insiders
34.0K shares
$27.0M · 13 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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full year
adjusted earnings per diluted share guidance
Source quote
“We are pleased with the strength of our first quarter performance. Which gives us the confidence to raise full year adjusted earnings per diluted share guidance to $44.20 to $45. From the prior range of $43.80 to $44.60.”
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January 2027
MedSurg business formally operating as Well-verse
Source quote
“The MedSurg business anticipates formally operating as Well-verse starting in January 2027, as part of a phased transition.”
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January 2026
wholesale acquisition cost decreases
Source quote
“This was partially offset by expected market dynamics including lower branded pharmaceutical pricing following wholesale acquisition cost decreases in January 2026 and branded to generic conversions.”
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January 2026
wholesale acquisition cost decreases
Source quote
“This was partially offset by lower branded pharmaceutical pricing following WACC decreases in January 2026 and branded to generic conversions.”
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fiscal 27
adjusted earnings per share outlook
Source quote
“As a result, we are raising our fiscal 27 adjusted earnings per share outlook to $44.20 to $45.”