An independent two-stage DCF analysis by a frontier AI model.
" data-astro-cid-ibv6tnlg> Derived by calculating the Compound Annual Growth Rate (CAGR) of McKesson's Free Cash Flow from FY2021 ($4091M) to FY2025 ($5548M). This anchors near-term projections precisely to actual historical performance rather than analyst speculation.
" data-astro-cid-ibv6tnlg> Calculated as the 10-Year Treasury Yield (4.18%) plus McKesson's current Free Cash Flow Yield (4.71%). This dynamically adjusts the required return based on the actual cash yield the market is currently demanding for the stock.
" data-astro-cid-ibv6tnlg> Computed strictly as exactly half of the 10-Year Treasury yield. This serves as a mathematically grounded, conservative proxy for long-term GDP growth, ensuring the terminal value doesn't artificially inflate the valuation.
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 1.1% | 1.6% | 2.1% | 2.6% | 3.1% |
|---|---|---|---|---|---|
| 1.1% | $9.27 | $7.91 | $6.90 | $6.11 | $5.49 |
| 1.6% | $10.15 | $8.54 | $7.37 | $6.48 | $5.78 |
| 2.1% | $11.21 | $9.27 | $7.91 | $6.90 | $6.11 |
| 2.6% | $12.51 | $10.15 | $8.54 | $7.37 | $6.48 |
| 3.1% | $14.15 | $11.21 | $9.27 | $7.91 | $6.90 |
■ Undervalued vs current price ■ Overvalued vs current price
McKesson Corporation is the ninth-largest company by revenue in the US and a critical backbone of the healthcare system. It delivers a third of all pharmaceutical products used in North America. Despite razor-thin operating margins of 1.5%, its immense scale generates massive free cash flow exceeding $9.1B. With strong revenue growth of 11.4%, McKesson is well-positioned for sustained value creation.
McKesson is experiencing strong momentum, driven by solid demand for pharmaceuticals, particularly in the specialty segment, and effective execution across its distribution network.
McKesson's economic moat is exceptionally wide, rooted in the massive scale of its distribution network and the critical nature of its services to the healthcare ecosystem.
Investor sentiment is largely positive, supported by the company's consistent earnings beats, share buyback programs, and the defensive nature of the healthcare sector.
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.