MCK - Embedded Expectations Analysis - 2019 01 25
McKesson Corporation (MCK:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 12.0x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about opioid litigation and legislation, pricing, segment revenue growth and operating marginsSpecifically, management may be concerned about the migration of health care services to lower-cost pharmacy settings and may be downplaying concerns about Canadian price declines. Management may also be concerned about opioid litigation costs and surcharges and the performance of the U.S. Pharmaceutical and Specialty Solutions segment. Additionally, management may be concerned about their ability to improve profitability and segment specific revenues, and may have concerns about the costs associated with various investments
McKesson provides pharmaceuticals and medical supplies and services to its customers. The company's segments include: U.S. Pharmaceutical and Specialty Solutions, which provides distribution and logistics services for branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs and other healthcare-related products to customers; European Pharmaceutical Solutions, which provides distribution and services to wholesale, institutional and retail customers in European countries where it owns, partners or franchises with retail pharmacies; and Medical-Surgical Solutions, which delivers medical-supply distribution, logistics, biomedical and other services to healthcare providers.
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