McKesson Corporation (MCK) distributes pharmaceuticals, medical-surgical supplies, and health and beauty care products. With a market cap of $86 billion, the company also develops, implements, and supports software that facilitates the integration of data throughout the health enterprise. In addition, McKesson offers analytic, care management, and patient solutions for payers.

Companies worth $10 billion or more are generally described as “large-cap stocks.” MCK effortlessly fits that bill, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical distribution industry. MCK stands as one of the titans in the U.S. pharmaceutical distribution landscape, boasting an expansive distribution network and comprehensive product offerings that enable it to effectively meet diverse customer needs. McKesson's ability to offer a wide range of services, from drug distribution to medical-surgical supply and technology solutions, allows it to tap into various revenue streams and mitigate risks associated with any single line of business.

Despite its notable strength, MCK slipped 6.4% from its 52-week high of $737.89, achieved on Jul. 8. Over the past three months, MCK stock has declined 3.4%, underperforming the SPDR S&P Health Care Services ETF’s (XHS) 1.3% gains during the same time frame.

In the longer term, shares of MCK rose 21.2% on a YTD basis and climbed 20.4% over the past 52 weeks, outperforming XHS’ YTD gains of 9.7% and marginal returns over the last year.

To confirm the bullish trend, MCK has been trading above its 200-day moving average since early November 2024. However, the stock has been trading below its 50-day moving average since early July. 

MCK's Q1 results, released on Aug. 6, exceeded expectations, with revenue jumping 23.4% year-over-year to $97.8 billion, driven by strong growth in its U.S. Pharmaceutical segment. Its adjusted EPS rose 4.8% from the year-ago quarter to $8.26, surpassing analyst estimates. However, the company's shares dropped 5.8% in the subsequent trading session despite the positive results.

In the competitive arena of medical distribution, Cencora, Inc. (COR) has taken the lead over MCK, showing resilience with a 31.4% uptick on a YTD basis and solid 21.1% gains over the past 52 weeks.

Wall Street analysts are bullish on MCK’s prospects. The stock has a consensus “Strong Buy” rating from the 17 analysts covering it, and the mean price target of $795.67 suggests a potential upside of 15.2% from current price levels.