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UPDATE: Goldman Sachs Lowers PT on McKesson Corporation Following ABC/WAG Deal

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In a report published Wednesday, Goldman Sachs analyst Robert P. Jones reiterated a Buy rating on McKesson Corporation (NYSE: MCK), but lowered the price target from $124.00 to $122.00.

In the report, Jones noted, “On our new estimates, ABC now trades at a 2x P/E multiple premium to MCK and CAH. While some may argue that ABC's valuation is justifiable given growth and support to numbers from the announced WAG deal, we find it difficult to overcome at current levels and maintain our Neutral rating. We still see the greatest risk/reward in MCK trading essentially at parity with CAH on our CY14, given (1) a more attractive growth profile through CY2014 after CAH's loss of WAG, (2) pending CVS contract renewals, which pose a risk for both, but greater for CAH at 31% of sales, versus MCK at 16%, and (3) a more attractive Specialty footprint - a differentiator in outer years.”

McKesson Corporation closed on Tuesday at $106.87.

Latest Ratings for MCK

DateFirmActionFromTo
Oct 2014Deutsche BankMaintainsBuy
Oct 2014JP MorganMaintainsOverweight
Sep 2014BarclaysInitiates Coverage onOverweight

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Posted-In: Goldman SachsAnalyst Color Price Target Analyst Ratings

 

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