MCK Valuation

McKesson Corp

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706.000

+3.06(0.435%)1D

Overview
Forecast
Valuation
Earnings

MCK Relative Valuation

MCK's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, MCK is overvalued; if below, it's undervalued.

Historical Valuation

McKesson Corp (MCK) is now in the Overvalued zone, suggesting that its current forward PE ratio of 18.05 is considered Overvalued compared with the five-year average of 13.95. The fair price of McKesson Corp (MCK) is between 473.29 to 680.20 according to relative valuation methord. Compared to the current price of 706.00 USD , McKesson Corp is Overvalued By 3.79%.

Relative Value

Fair Zone

473.29-680.20

Current Price：706.00

3.79%

Overvalued

18.05

Trailing

Forward

13.58

EV/EBITDA

McKesson Corp. (MCK) has a current EV/EBITDA of 13.58. The 5-year average EV/EBITDA is 10.62. The thresholds are as follows: Strongly Undervalued below 6.01, Undervalued between 6.01 and 8.31, Fairly Valued between 12.92 and 8.31, Overvalued between 12.92 and 15.23, and Strongly Overvalued above 15.23. The current Forward EV/EBITDA of 13.58 falls within the Overvalued range.

14.63

EV/EBIT

McKesson Corp. (MCK) has a current EV/EBIT of 14.63. The 5-year average EV/EBIT is 11.76. The thresholds are as follows: Strongly Undervalued below 7.08, Undervalued between 7.08 and 9.42, Fairly Valued between 14.10 and 9.42, Overvalued between 14.10 and 16.44, and Strongly Overvalued above 16.44. The current Forward EV/EBIT of 14.63 falls within the Overvalued range.

0.20

McKesson Corp. (MCK) has a current PS of 0.20. The 5-year average PS is 0.17. The thresholds are as follows: Strongly Undervalued below 0.10, Undervalued between 0.10 and 0.13, Fairly Valued between 0.21 and 0.13, Overvalued between 0.21 and 0.24, and Strongly Overvalued above 0.24. The current Forward PS of 0.20 falls within the Historic Trend Line -Fairly Valued range.

14.78

P/OCF

McKesson Corp. (MCK) has a current P/OCF of 14.78. The 5-year average P/OCF is 11.32. The thresholds are as follows: Strongly Undervalued below 5.92, Undervalued between 5.92 and 8.62, Fairly Valued between 14.02 and 8.62, Overvalued between 14.02 and 16.72, and Strongly Overvalued above 16.72. The current Forward P/OCF of 14.78 falls within the Overvalued range.

17.18

P/FCF

McKesson Corp. (MCK) has a current P/FCF of 17.18. The 5-year average P/FCF is 13.48. The thresholds are as follows: Strongly Undervalued below 7.34, Undervalued between 7.34 and 10.41, Fairly Valued between 16.55 and 10.41, Overvalued between 16.55 and 19.62, and Strongly Overvalued above 19.62. The current Forward P/FCF of 17.18 falls within the Overvalued range.

McKesson Corp (MCK) has a current Price-to-Book (P/B) ratio of -44.35. Compared to its 3-year average P/B ratio of -32.21 , the current P/B ratio is approximately 37.71% higher. Relative to its 5-year average P/B ratio of -104.43, the current P/B ratio is about -57.53% higher. McKesson Corp (MCK) has a Forward Free Cash Flow (FCF) yield of approximately 7.13%. Compared to its 3-year average FCF yield of 6.56%, the current FCF yield is approximately 8.76% lower. Relative to its 5-year average FCF yield of 9.05% , the current FCF yield is about -21.22% lower.

-44.35

P/B

Median3y

-32.21

Median5y

-104.43

7.13

FCF Yield

Median3y

6.56

Median5y

9.05

Competitors Valuation Multiple

The average P/S ratio for MCK's competitors is 0.49, providing a benchmark for relative valuation. McKesson Corp Corp (MCK) exhibits a P/S ratio of 0.20, which is -58.23% above the industry average. Given its robust revenue growth of 23.39%, this premium appears sustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of MCK increased by 25.83% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 21.44 to 28.34.

The secondary factor is the Revenue Growth, contributed 23.39%to the performance.

Overall, the performance of MCK in the past 1 year is driven by P/E Change. Which is more unsustainable.

23.39%

79.28B → 97.83B

Revenue Growth

-29.75%

1.21 → 0.85

Margin Expansion

32.19%

21.44 → 28.34

P/E Change

25.83%