McKesson (MCK) Stock Forecast & Price Target

McKesson is viewed positively because its scale-driven distribution moat, serving more than one-third of medications in North America with 99.9% order accuracy, supports durable volume growth in a structurally expanding U.S. pharma market. Its mix is shifting toward higher-growth, higher-margin specialty, oncology, biosimilars, and prescription technology solutions, while services like Macro Helix, Onmark, and Biologics deepen customer stickiness and create stronger switching costs. Financially, fiscal 2025 revenue was $359.1 billion with $5.6 billion of adjusted EBIT and $33.05 of EPS, and management expects 8%-11% adjusted EBIT growth and 13%-16% adjusted EPS growth from the core businesses, aided by strong free cash flow and share repurchases.

McKesson is facing a fundamentally challenged setup because employer-sponsored coverage erosion is threatening a meaningful RxTS revenue stream, with GLP-1 prior authorizations contributing 9.5%-11.5% of segment revenue, or roughly $560-$660M, while 6% of large employers dropped coverage in 2026 and another ~10% plan to do so in 2027. At the same time, the company operates with razor-thin distribution economics, and adjusted gross margin already fell about 40 bps to 3.6% in fiscal 2025 as lower-margin specialty and GLP-1 mix weighed on profitability, with further erosion expected. On top of that, the 2028 IRA negotiations could pressure about $28B of Medicare drug spend through 40-60% price cuts, while customer concentration and ongoing opioid liabilities add additional strain to earnings durability.