Is McKesson Corporation (MCK) overvalued?
On Equity Rank's model estimate, MCK trades 71% above its fair value. McKesson Corporation (MCK) last closed at $1,060.84; the multi-method model fair value is $621.90.
| Price | Model fair value | Price vs model |
|---|---|---|
| $1060.84 | $621.90 | 71% above |
What the answer rests on
- 1 of 7 valuation methods put MCK's value above its price and 6 put it below, so the methods mostly agree.
- To justify today's price, MCK's free cash flow would need to grow about 0.2% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 5.5% a year.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 4% above to 72% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind MCK's fair value · What prices assume · Other companies