Amid the excitement over GLP-1 weight-loss drugs, a few of the unheralded beneficiaries are set to report earnings starting Wednesday afternoon. The Medical-Wholesale Drug/Supplies group, which is led by McKesson (MCK), is by far the stock market's top-rated medical group, ranked No. 16 among 197 industry groups by IBD.
McKesson is part of the flagship IBD 50 list of leading growth stocks. IBD Stock Checkup shows that the group's three titans — McKesson, Cencora (COR) and Cardinal Health (CAH) — all have excellent 98 IBD Composite Ratings, a single rating for both technical and fundamental factors, out of a possible 99. All three are part of the S&P 500.
On Oct. 17, Citi hiked its price target for buy-rated MCK stock to 525 from 490, highlighting potential upside to fiscal second-quarter estimates, principally due to GLP-1 usage.
Citi also noted positive trends for the group as a whole, including double-digit growth in branded drugs, normalizing medical utilization patterns and a better pricing environment for generic drugs.
Argus analyst David Toung raised his MCK stock target to 480 from 450 on Oct. 9, keeping a buy rating. He described McKesson as "riding the tailwinds" from surging demand for GLP-1 weight-loss drugs, as well as higher utilization of specialty and oncology drugs.
McKesson reports Wednesday after the close, Cencora, which recently changed its name from AmerisourceBergen, reports early Thursday. Cardinal Health reports Friday morning.
Also of note: Weight-loss drug leaders Novo Nordisk (NVO) and Eli Lilly (LLY) report early Thursday.
McKesson Earnings
Estimates: Analysts expect McKesson earnings per share to rise 1.5% to $6.16. Sales are expected to grow 8% to $76 billion.
Results: Check back late Wednesday.
Cencora Earnings
Estimates: Cencora earnings per share are seen rising 8% to $2.81 as revenue expands 8% to $66,3 billion
Results: Check back early Thursday.
Cardinal Health Earnings
Estimates: Fiscal Q1 EPS is seen rising 17% to $1.40 on 10% revenue growth to $54.8 billion.
Results: Check back early Friday.
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