Overview
Morgan Stanley has increased its price target for McKesson to $966.00 from $916.00 and continues to carry an Overweight recommendation on the healthcare services company. The brokerage said recently refreshed disclosures for McKesson’s Oncology and Multispecialty businesses shed useful light on the revenue trajectory and profit dynamics in those segments.
Valuation and analyst range
According to InvestingPro data referenced in the disclosures, analysts’ price targets for McKesson span from $760 to $1,000. McKesson shares were trading at $826.62 at the time of the report, which InvestingPro’s fair value framework suggests is below certain valuation benchmarks.
Growth drivers
Morgan Stanley underscored that acquisitions such as FCS and PRISM have supported growth, but it flagged McKesson’s organic expansion as notable as well. The firm pointed to 13% year-over-year organic growth in the fiscal second quarter of 2026 and reiterated McKesson’s long-term growth targets of 13-16%.
InvestingPro data cited alongside the firm’s note shows McKesson’s revenue increased by 17.23% over the last twelve months. The platform also reports a PEG ratio of 0.39, which indicates the stock is trading at a relatively low price-to-earnings ratio when set against its growth rate.
Earnings and financial health
Morgan Stanley maintained its fiscal 2026 earnings-per-share estimate for McKesson at $38.60, closely aligned with the consensus estimate of $38.69. The company reported diluted EPS of $32.12 over the last twelve months, and InvestingPro’s aggregated metrics assign McKesson an overall financial health score of "GREAT."
Divestiture plan and valuation methodology
The bank’s revised price target incorporates McKesson’s announced intention to spin off its Med-Surg business via an initial public offering expected in the second half of calendar year 2027. Morgan Stanley derived the $966 target from applying a 20.0x multiple to calendar year 2027 EPS of $48.29.
Shareholder returns and recent company actions
InvestingPro’s records show McKesson has paid dividends for 32 consecutive years, with 18 years of consecutive increases. The company declared a quarterly dividend of $0.82 per share, payable on April 1, 2026.
Near-term headwinds and external analyst views
McKesson experienced a fourth-quarter earnings shortfall and issued guidance for 2026 that was lighter than some investors expected. Jefferies attributed that weaker guidance to persistent cost inflation pressures. Despite those results, TD Cowen retains a Buy rating with a $1,000 price target, signaling continued confidence among some analysts in the company’s growth initiatives and long-term targets.
Related analyst shifts in consumer staples
The note also addressed recent analyst moves at McCormick & Company following its financial disclosures. Bernstein SocGen reduced its price target for McCormick to $85, citing weak guidance for fiscal 2026 and forecasted organic sales growth that falls short of consensus. BofA Securities lowered its McCormick price target to $80, pointing to an organic sales miss in the fourth quarter tied to inventory drawdowns by a Mexican customer. Both Bernstein SocGen and BofA maintained positive ratings on McCormick.
Conclusion
Morgan Stanley’s target increase for McKesson rests on newly detailed segment disclosures, a mix of acquisition- and organic-driven growth, and a valuation anchored to calendar 2027 earnings. The stock remains below some analysts’ higher targets while other brokerages continue to voice confidence despite recent earnings and guidance challenges. Investors will likely watch the Med-Surg divestiture timetable and near-term cost pressures as they evaluate the long-term thesis.