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Is this Large Market Cap Stock target price reasonable for McKesson Corporation (NYSE:MCK)?

The company in question is, McKesson Corporation (NYSE:MCK) currently with a stock price of 161 (-0.66% today). The market cap for McKesson Corporation is 36579.2, and is in the sector Services, and Drugs Wholesale industry. The target price for McKesson Corporation is 195.93. Currently McKesson Corporation is trading with a P/E of 15.77, and a forward P/E of 11.22. Average volume for McKesson Corporation is 1508.77 and so far today it is 977300.

Performance in the last year for McKesson Corporation has been -16.38%. For EPS growth, McKesson Corporation has seen a growth of 30.10%, and is looking to grow in the next year to 5.33%. More long term stats show that EPS growth has been 18.00% over the last five years and could be 10.55% for the next five years. McKesson Corporation has seen sales growth quarter over quarter at 4.60%, with EPS growth quarter over quarter at 15.20%. The 20-day simple moving average is -9.82%, with the 200-day simple moving average coming to -7.49%.

Since the IPO date for McKesson Corporation on the 11/15/1994, McKesson Corporation has seen performance year to date to be -17.97%. With McKesson Corporation trading at 161, the dividend yield is 0.70%, and the EPS is 10.21.

So could McKesson Corporation, be undervalued? Well as said before P/E is 15.77. The PEG is 1.49, P/S is 0.19 and the P/B is at 3.92. The P/cash is 7.85, with P/free cash flow at 8.8.

McKesson Corporation ability to deal with debt shows that the current ratio is 1.1, and the quick ratio is 0.6. This is with long term debt/equity at 0.64, and total debt/equity at 0.88.

In terms of margins, McKesson Corporation has a gross margin of 5.90%, an operating margin of 1.90% and a profit margin of 1.20%.Payout ratio for McKesson Corporation is 11.50%. Return on assets come to 3.90% with return on investment coming to 15.50%.

Insider ownership for McKesson Corporation, is at 0.29% and institutional ownership comes to 86.60%. Outstanding shares are at 227.2. While shares float is 224.38. The float short is currently 1.53%, and short ratio is 2.28.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Peter Clarke

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