MCK
McKesson Corporation
Dividend / Cash flow
★ Quality 83/100Price today
$832.90
what the market pays
Worth
$1,041
calculated cycle value
Price is 20% below its value
charlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Established business paying dividends
$1,051.61
per share
How it's calculated
McKesson Corporation — high assistant path (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Dividend / Cash flow · vs 42 peers
You pay 17.8x times this business's cash flow; its sector median is 25.8x.
25% below what Charlie thinks it's worth (22.2x) — that gap is your safety margin.
Why Undervalued?
Its free cash flow is $47.28/share × 22.2x multiplier minus $10.35 in negative net cash = $1,041.26 in intrinsic value. Today's price of $832.90 is 25% below that value — there's a real safety margin to enter.
The price is 20% below the calculated value. There's a real safety margin.
The model asks for a discount to absorb estimate errors. That cushion is here.
If the business disappoints a little, the price should hold near $833.01.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$833.01
-20% off Value
🟡 Discounted
≤$989.20
-5% off Value
🟢 Today
$832.90
+25% Valor
Undervalued
Today's price offers a real discount to the calculated value. For the long run, this is the kind of entry that builds wealth.
“Price is what you pay. Value is what you get.”
— Warren Buffett
Model updated · July 2026
The business
McKesson is the artery every box of medicine in North America passes through.
McKesson distributes drugs. It buys pharmaceuticals from manufacturers and delivers them to pharmacies, hospitals, and clinics across North America. It moves $403B in revenue with barely a 4% gross margin — it earns on volume, not margin, pocketing a fraction of every box that passes through.
It's one of three distributors that control 90% of the U.S. market. Replicating its logistics network, its manufacturer contracts, and its scale would take decades and billions. The margin is so thin that no newcomer wants to enter — and that's precisely the barrier.
Revenue history
From $263.9B to $403.4B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $403.4B · FY2026
Of every $100 in sales, $99 goes to costs and operations; $1 is left as net profit (1% margin).
Catalysts and risks
Oncology segment (US Oncology Network) growing double digits, with a higher margin than base distribution.
Aggressive buybacks: the company reduces shares year after year, pushing FCF per share toward $47.
FY2026 closed at $403.4B in revenue, +12% year-over-year, with FCF of $5.7B fueling the dividend and buybacks.
4% gross margin: any logistics disruption or regulatory pressure on prices hits hard.
Opioid litigation still weighs on cash flow with settlement payments stretching out over years.
Customer concentration: losing a big contract (CVS, a chain) moves the needle.
Charlie's note
“Paying 22x for a 4%-margin business growing at 11% requires that the logistics machine stays untouchable; the moat of the big three justifies it, but only if you have the patience not to overpay for the privilege.”
Analysis · June 2026
So when would be a good price for McKesson Corporation?
Today it trades below what we calculate. If you want us to tell you when that changes —or when the value itself moves because the company reported— we will email you.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.