McKesson Earnings: Strong End to 2024 With All Cylinders Firing, and 2025 Looks Even Stronger

Narrow-moat McKesson reported fourth-quarter earnings that came in higher than our expectations. Total sales of $76.4 billion were up 10.8% year over year as demand and the overall drug prescription trend remain stable and growing. Looking out to fiscal 2025, management provided a significantly better-than-expected guidance of 15%-17% revenue growth, driven by double-digit growth in both distribution and prescription technology solutions, and adjusted diluted EPS of $31.25 to $32.05 that roughly amounts to 14%-17% growth. After updating our near-term assumptions and baking in time value of money impacts, we raise our fair value estimate to $460 per share from $410.