"Operational excellence was the key theme across all of MCK's businesses, and we could sense a strong feeling of confidence exuded by management surrounding the growth opportunities for Distribution Solutions," wrote Avondale.
The analysts kept their Market Perform rating unchanged and are waiting for concrete evidence concerning stabilized operations to reevaluate their estimates and price target. They stated several aspects concerning the company's growth beyond fiscal 2017 year, including:
- The company will partially offset some of the larger customer losses (i.e., Rite Aid).
- Reversion in generic prices should largely dissipate.
- Higher specialty drug mix will drive DS operating profit dollar growth, albeit more in-line with revenue growth.
At time of writing, McKesson was trading down 0.47 percent on the day at $187.22.
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