McKesson (MCK) reported first quarter 2026 earnings on August 5, with sales of US$105.38b compared with US$97.83b a year earlier, while net income and earnings per share moved lower.

At a share price of US$869.26, McKesson has delivered a 15.18% 90 day share price return and a 28.94% total shareholder return over the past year, while the recent earnings release and ongoing buybacks appear to be shaping near term momentum.

If McKesson’s mix of earnings and buybacks has you thinking about where else capital is being put to work in healthcare, it could be worth reviewing 42 healthcare AI stocks.

Bulls point to McKesson’s rising sales and large buybacks, while bears worry about the earnings slip behind the recent share price jump. Which side does the current valuation lean toward as you weigh the risk and reward?

Most Popular Narrative: 11.4% Undervalued

The most followed narrative currently places McKesson’s fair value at US$980.80, above the recent close of US$869.26, which frames the stock as undervalued based on that model. That view focuses on how the business mix, margins and capital returns could shape future earnings power.

Increasing adoption of specialty and oncology pharmaceuticals, alongside recent acquisitions (Core Ventures and PRISM Vision) that expand the provider network and service portfolio, are improving revenue mix quality and positioning the company for higher operating margins and earnings growth.

Read the complete narrative. Read the complete narrative.

Want to see what is driving that higher fair value for McKesson? The narrative emphasizes steady revenue expansion, slightly higher margins and a shrinking share count to reframe future earnings power and the P/E investors might be willing to pay.

Result: Fair Value of $980.80 (UNDERVALUED)

However, the McKesson narrative could be tested if tighter drug pricing regulation or further vertical integration by manufacturers and payers begins to squeeze distributor margins.

Next Steps

Given the mix of optimism and concern around McKesson, it makes sense to look at the full picture and decide quickly where you stand based on 4 key rewards and 1 important warning sign.

Looking for more McKesson sized investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.