Is It Time To Reassess McKesson (MCK) After Recent Pullback And DCF Valuation Gap

Simply Wall St.03-21

If you are wondering whether McKesson at around US$885.84 is still offering fair value or starting to look stretched, this article walks through the key numbers that matter. The stock price has moved ...

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The stock price has moved ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/healthcare/nyse-mck/mckesson/news/is-it-time-to-reassess-mckesson-mck-after-recent-pullback-an\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is It Time To Reassess McKesson (MCK) After Recent Pullback And DCF Valuation Gap</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs It Time To Reassess McKesson (MCK) After Recent Pullback And DCF Valuation Gap\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-03-21 19:04 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/healthcare/nyse-mck/mckesson/news/is-it-time-to-reassess-mckesson-mck-after-recent-pullback-an><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you are wondering whether McKesson at around US$885.84 is still offering fair value or starting to look stretched, this article walks through the key numbers that matter. The stock price has moved ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/healthcare/nyse-mck/mckesson/news/is-it-time-to-reassess-mckesson-mck-after-recent-pullback-an\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0861579265.USD","symbol_name":"联博低波幅策略股票基金A","start_time":0,"source_url":"https://simplywall.st/stocks/us/healthcare/nyse-mck/mckesson/news/is-it-time-to-reassess-mckesson-mck-after-recent-pullback-an","article_id":"2621767437","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/company-cover/288195-main-header/1756206015044"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/healthcare/nyse-mck/mckesson/news/is-it-time-to-reassess-mckesson-mck-after-recent-pullback-an","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2621767437","pubTimestamp":1774091081,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether McKesson at around US$885.84 is still offering fair value or starting to look stretched, this article walks through the key numbers that matter.\nThe stock price has moved by a 5.9% decline over the past week and a 6.5% decline over the past month, set against a 7.6% gain year to date and a 34.5% return over the last year, which may have shifted how the market is thinking about its risk and reward profile.\nRecent headlines around McKesson have focused on its role...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0861579265.USD":"联博低波幅策略股票基金A","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","LU0122379950.USD":"贝莱德世界健康科学A2","LU0203347892.USD":"SCHRODER ISF QEP GLOBAL ACTIVE VALLUE \"A\" (USD)  INC AV","LU0314106906.USD":"MANULIFE GF GLOBAL EQUITY \"AA\" (USD) INC","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","LU0251142724.SGD":"Fidelity America A-SGD","LU2324357040.USD":"HSBC GIF GLOBAL EQUITY SUSTAINABLE HEALTHCARE \"AC\" (USD) ACC","LU0251131958.USD":"FIDELITY AMERICA \"A\" (USD) ACC","LU2468319806.SGD":"MANULIFE GF HEALTHCARE \"AA\" (SGDHDG) ACC","LU1983260115.SGD":"Janus Henderson Horizon Global Sustainable Equity A2 SGD-H","LU0203345920.USD":"SCHRODER ISF QEP GLB ACT. 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The stock price has moved by a 5.9% decline over the past week and a 6.5% decline over the past month, set against a 7.6% gain year to date and a 34.5% return over the last year, which may have shifted how the market is thinking about its risk and reward profile. Recent headlines around McKesson have focused on its role within the Healthcare sector and broader market commentary. This helps explain why the share price has seen both strong multi year returns of 159.2% over three years and 369.4% over five years, as well as short term pullbacks. This mix of long term strength and recent volatility has put valuation in sharper focus for many investors. McKesson currently scores a 4 out of 6 valuation check score. The next sections break down what different valuation methods say about that, before finishing with a way to look beyond the models to assess whether the current price truly makes sense.  McKesson delivered 34.5% returns over the last year. See how this stacks up to the rest of the Healthcare industry. AdvertisementApproach 1: McKesson Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and then discounting those back to a present value. It is essentially asking what tomorrow’s cash is worth in today’s dollars. For McKesson, the model uses a 2 Stage Free Cash Flow to Equity approach built on cash flow projections. The latest twelve month Free Cash Flow is about $9.61b. Analysts have provided detailed estimates out to 2029, and Simply Wall St then extrapolates further, with Free Cash Flow in 2030 projected at $7.04b and extended estimates running through 2035. After discounting these projected cash flows, the DCF model arrives at an estimated intrinsic value of about $1,481.84 per share. Compared with a recent share price of around $885.84, this suggests that McKesson is trading at a discount of roughly 40.2%, indicating a material gap between the modeled value and current market pricing. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests McKesson is undervalued by 40.2%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks. MCK Discounted Cash Flow as at Mar 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for McKesson. Approach 2: McKesson Price vs Earnings For a profitable company like McKesson, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. Investors generally accept that higher growth expectations and lower perceived risk can support a higher “normal” P/E, while slower growth and higher risk usually justify a lower one. McKesson currently trades on a P/E of about 25.0x. That sits above the broader Healthcare industry average P/E of roughly 21.2x, and slightly below the peer group average of about 26.4x. On the surface, this points to the market pricing McKesson at a premium to the sector overall, but broadly in line with closer peers. Simply Wall St’s “Fair Ratio” for McKesson is 36.2x. This is a proprietary estimate of what McKesson’s P/E might be given its earnings growth profile, industry, profit margins, market capitalization and risk characteristics. Because it blends these company specific factors rather than just comparing with broad industry or peer averages, it can offer a more tailored yardstick. With the current P/E of 25.0x sitting below the Fair Ratio of 36.2x, this framework points to McKesson trading on a lower multiple than those fundamentals might support. Result: UNDERVALUED NYSE:MCK P/E Ratio as at Mar 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies. Upgrade Your Decision Making: Choose your McKesson Narrative Earlier it was mentioned that there is an even better way to understand valuation. Narratives take center stage as your way of attaching a clear story about McKesson to specific assumptions about future revenue, earnings and margins. You can then link that story to a financial forecast and to a fair value you can compare with today’s price on Simply Wall St’s Community page. On the platform, Narratives are designed to be simple to use. You can see in one place how your view of McKesson, for example that biosimilar optionality and a perceived premium safe haven role support a higher valuation, stacks up against a more cautious view that regulatory pressure, consolidation and lower margin generics justify a lower fair value closer to the US$640 end of analyst targets rather than the US$830 high. As news or earnings arrive, those Narratives refresh so you can quickly see whether your fair value still lines up with the live share price. Do you think there's more to the story for McKesson? Head over to our Community to see what others are saying! NYSE:MCK 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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