TLDR
- McKesson stock jumped 16% Thursday after reporting Q3 fiscal 2026 earnings that beat Wall Street expectations with EPS of $9.34 versus consensus of $9.17.
- Revenue climbed 11% year-over-year to $106.16 billion, topping estimates of $105.80 billion as the pharmaceutical distributor showed strength across key segments.
- TD Cowen raised its price target to $1,012 citing “strong, steady performance” in Oncology and Prescription Technology Solutions while maintaining a Buy rating.
- Wells Fargo and Mizuho held neutral stances despite price target increases, noting limited visibility into fiscal 2027 guidance.
- The company is preparing to potentially spin off its medical-surgical business through an IPO while integrating recent acquisitions like Florida Cancer Specialists.
McKesson shares rocketed higher Thursday afternoon as investors digested third quarter results that crushed Wall Street’s expectations.
The pharmaceutical distributor reported EPS of $9.34 for Q3 fiscal 2026, beating the consensus estimate of $9.17. That marked 16% growth compared to the same period last year.
Revenue hit $106.16 billion for the quarter, up 11% year-over-year. Analysts had projected $105.80 billion.
The earnings release sent shares soaring more than 16% in Thursday trading.
Analysts Rush to Raise Price Targets
TD Cowen’s Charles Rhyee maintained his Buy rating and bumped his price target from $1,000 to $1,012. The new target implies roughly 7% upside from current levels.
Rhyee pointed to what he called “strong, steady performance” in McKesson’s Oncology & Multispecialty and Prescription Technology Solutions segments. These divisions helped push adjusted operating income above expectations.
Baird analyst Eric Coldwell also kept his Buy rating intact while raising his target from $968 to $974. That suggests about 3% potential upside.
Coldwell’s team walked away from the results more optimistic than before, according to his note.
Not every analyst jumped on the bullish bandwagon. Wells Fargo’s Stephen Baxter issued a Hold rating despite lifting his target from $914 to $925.
Baxter noted limited visibility into fiscal 2027 guidance but called the overall outlook constructive. His new target actually implies 2% downside from current prices.
Mizuho’s Steven Valiquette took a similar approach with a Hold rating and a modest bump from $880 to $885. That target suggests 6% downside risk.
What Wall Street Thinks Now
McKesson carries a Strong Buy consensus rating based on nine Buy ratings and two Hold ratings issued over the past three months. Zero analysts recommend selling the stock.
The average price target sits at $959.91 across Wall Street firms covering the stock. That implies just 1% growth potential from current levels.
The company is working through a major restructuring that includes separating its medical-surgical business. Management highlighted progress on transition service agreements during the earnings call.
McKesson is eyeing a potential IPO for the medical-surgical unit. The company is also integrating recent acquisitions including Florida Cancer Specialists and Prism Vision.
The oncology and biopharma services divisions delivered strong growth in the quarter. North American pharmaceutical distribution operations also expanded.
Management raised full-year earnings guidance following the Q3 beat. The company sits at the center of the pharmaceutical supply chain, connecting manufacturers with providers and pharmacies.
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