Zacks Investment Research downgraded shares of McKesson Corporation (MCK) from OUTPERFORM to NEUTRAL on January 17, 2014, with a target price of $177.00.
McKesson Corporation's second quarter of fiscal 2014 earnings of $2.27 per share was up 18.8% from the year-ago quarter. The Zacks Consensus Estimate was $2.03 per share. Revenues grew 10.7% to $32.9 billion, marginally surpassing the Zacks Consensus Estimate of $32.4 billion, driven by growth in generics. We are encouraged by the company's upbeat performance in the fiscal first half and subsequent increase in guidance. However, we were disappointed by the company's failure to acquire Celesio. The acquisition would have allowed McKesson to gain a solid foothold in Europe, thereby geographically expanding its core operations further. We downgrade our recommendation to Neutral as of now given the lack of catalysts in the short-term.
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