MCK - Embedded Expectations Analysis - 2019 08 28
McKesson Corporation (MCK:USA) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings, with a 13.2x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about meeting their EPS guidance, revenue growth, and returning value to shareholders.Specifically, management may lack confidence in their ability to achieve their recently increased EPS guidance for 2020, and may be concerned about continued biopharma price increases. Furthermore, they may lack confidence in their assertion that their presence in the US and Canada offers them a unique perspective, and may lack confidence in their ability to grow their specialty provider solutions business. Moreover, they may be concerned about UK-related FX headwinds to profitability, and may lack confidence in their ability to sustain revenue growth. Finally, they may be concerned about their ability to continue returning value to shareholders.
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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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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