McKesson Corporation (MCK) DCF Valuation
TGM's two-stage DCF values McKesson Corporation (MCK) between $842.74 and $1,666.06 depending on assumptions, with a base case of $1,159.58. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$750.63 is justified only if free cash flow grows about -0.0% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 6.9%/yr | 8.5% | $842.74 |
| Base case | 9.9%/yr | 7.5% | $1,159.58 |
| Optimistic | 12.9%/yr | 6.5% | $1,666.06 |
| Analyst DCF (FMP) | independent reference — different model | $1,283.79 | |
Current Price
$750.63
Market-Implied Growth
-0.0%/yr
vs +8.8% 5Y actual
Model Scenario Range
$842.74 – $1,666.06
model output — not a price target
MCK DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for MCK (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $4.9B · 0.12B shares · net debt $2.4B
Estimated Fair Value
$1527.24
+103.5% vs $750.63
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 9.9%/yr FCF growth and 10-year horizon fixed. Green = above today's $750.63; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $2111 | $2349 | $2666 | $3110 | $3777 |
| 6.5% | $1647 | $1783 | $1953 | $2171 | $2463 |
| 7.5% | $1340 | $1425 | $1527 | $1652 | $1809 |
| 8.5% | $1122 | $1179 | $1245 | $1324 | $1418 |
| 9.5% | $960 | $1000 | $1045 | $1097 | $1159 |
About McKesson Corporation
McKesson Corporation is a prominent global provider of healthcare services, operating extensively in both the United States and international markets. Its diverse operations are strategically organized into four key business segments. The U.S. Pharmaceutical division plays a crucial role in the distribution of a comprehensive array of pharmaceutical products, encompassing branded, generic, specialty, biosimilar, and over-the-counter medications, alongside other health-related merchandise. This segment also delivers specialized support to community-based oncology and other specialty medical practices through practice management tools, technology solutions, clinical guidance, and broader business services. Furthermore, it assists pharmacies with consulting, outsourcing, and technology services, while also furnishing financial, operational, and clinical software solutions. Internationally, the company's dedicated segment provides distribution and support services to wholesale, institutional, and retail clients across 13 European nations and Canada. The Medical-Surgical Solutions unit is focused on supplying healthcare providers with essential medical-surgical products, sophisticated logistics management, and a variety of associated services. Finally, the Prescription Technology Solutions (RxTS) segment is designed to address complex medication challenges for patients. It collaborates with biopharmaceutical companies and life sciences partners to improve patient journeys, leveraging innovative solutions for medication access and adherence by connecting pharmacies, healthcare providers, payers, and biopharma entities. This segment further offers third-party logistics and wholesale distribution assistance. Founded in 1833, McKesson Corporation maintains its corporate headquarters in Irving, Texas.
- Sector
- Healthcare
- Industry
- Medical - Distribution
- CEO
- Brian S. Tyler