Industry Overview - The Zacks Medical - Dental Supplies industry is expected to maintain upward momentum in 2026 due to innovation, an aging population, and normalized orders post-COVID-19 [1] - The global medical supplies industry is projected to reach $163.5 billion by 2027, growing at a CAGR of 3.4% from 2022 to 2027 [4] Technological Advancements - Continued adoption of digital services and AI-enabled tools is anticipated to enhance patient experience and reduce administrative burdens for physicians [2] - Innovations such as CAD/CAM systems, 3D imaging, and AI diagnostics are expected to improve treatment efficacy and broaden product use [8] Market Trends - The industry is shifting towards higher-margin specialty areas like oncology and urology, with precision health and theranostics emerging as significant trends [3] - There is a growing emphasis on preventive care and minimally invasive procedures, which is expanding market segments for dental consumables [9] Regional Growth Drivers - Emerging markets, particularly in Asia-Pacific, are benefiting from increased healthcare expenditure and improved access to care, contributing to faster growth rates [10] Economic Factors - Strong healthcare infrastructure and higher disposable income in developed regions support the adoption of advanced dental products [11] Challenges - U.S. tariffs have raised costs on essential imported dental supplies, leading to increased prices and supply-chain disruptions [12] - The industry is responding by shifting supply chains towards domestic production to mitigate tariff exposure [13] Company Performance - The industry has outperformed its sector with a collective gain of 6.6% over the past year, compared to the Zacks Medical sector's rise of 1.9% [16] - The industry is currently trading at a forward P/E of 17.67X, lower than the S&P 500's 22.81X [19] Company Insights - West Pharmaceutical is expected to maintain growth momentum in 2026, driven by demand for high-value products and operational improvements [21][22] - McKesson anticipates revenue growth of 11-15% in fiscal 2026, supported by strong demand in specialty distribution [30] - Cardinal Health expects revenues from its Pharmaceutical segment to grow 15-17% year-over-year, with challenges from competitive pricing pressures [35] - Align Technology is positioned for growth in 2026 due to restructuring actions and technological innovations, with a projected revenue increase of 3.7% [42]

Company Performance - McKesson (MCK) closed at $821.84, reflecting a -2.22% change from the previous day, underperforming the S&P 500's daily loss of 2.06% [1] - Over the past month, McKesson's shares have increased by 2.7%, while the Medical sector has decreased by 0.88% and the S&P 500 has gained 1.63% [1] Upcoming Earnings - McKesson's earnings report is scheduled for February 4, 2026, with expected earnings of $9.19 per share, indicating a year-over-year growth of 14.45% [2] - The consensus estimate for revenue is $105.66 billion, representing a 10.88% increase compared to the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, the Zacks Consensus Estimates predict earnings of $38.61 per share and revenue of $408.23 billion, reflecting changes of +16.82% and +13.7% respectively from the previous year [3] Analyst Estimates - Recent modifications to analyst estimates for McKesson indicate the dynamic nature of near-term business trends, with upward revisions suggesting analysts' positive outlook on the company's operations [4] Zacks Rank - McKesson currently holds a Zacks Rank of 2 (Buy), with the Zacks Rank system showing a strong track record of success, particularly for 1 stocks which have delivered an average annual return of +25% since 1988 [6] Valuation Metrics - McKesson has a Forward P/E ratio of 21.77, which is a premium compared to the industry average Forward P/E of 18.28 [7] - The company's PEG ratio is 1.38, while the Medical - Dental Supplies industry average PEG ratio is 1.97 [7] Industry Overview - The Medical - Dental Supplies industry, part of the Medical sector, has a Zacks Industry Rank of 54, placing it in the top 23% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Overview - McKesson Corporation (NYSE:MCK) is one of the largest healthcare products and services providers in America [2] - The company's shares have gained 42% over the past year but have decreased by 5% since late November [2] Analyst Ratings - Deutsche Bank raised McKesson's share price target to $904 from $861 and maintained a Buy rating, noting that the company's plans to exit its surgical business could be dilutive but may also enhance share price performance [2] - TD Cowen also maintained a Buy rating with a price target of $1,000, expressing optimism about McKesson's growth potential and ability to meet long-term targets [2] Market Context - Jim Cramer commented on McKesson in relation to President Trump's views on the healthcare industry, suggesting that potential pricing reforms could negatively impact the company [2] - Despite these concerns, McKesson's stock continues to reach 52-week highs, indicating resilience against political pressures [2]

Company Overview - McKesson Corporation (NYSE:MCK) is a leading healthcare services and information technology company, providing pharmaceuticals and medical supplies in the United States and internationally, playing a crucial role in the healthcare supply chain [1] Stock Performance - On January 14, 2026, a new price target for McKesson was set at $968, suggesting a potential increase of about 16.16% from the current trading price of approximately $833.36 [2] - The stock's current price is $833.07, reflecting a slight increase of 1.10% or $9.09, with trading between $820.13 and $834.72 [2] Institutional Investments - GWN Securities Inc. acquired a new stake in McKesson, purchasing 3,570 shares valued at approximately $2.76 million during the third quarter, indicating growing interest in the stock [3] - Solstein Capital LLC significantly increased its position in McKesson by 171.4% in the second quarter, now holding 38 shares valued at $28,000, with other institutional investors also making new investments [4] Market Capitalization and Trading Activity - McKesson's market capitalization stands at approximately $104.13 billion, highlighting its significant presence in the healthcare sector [5] - The stock has reached a high of $895.58 and a low of $570.51 over the past year, with a trading volume of 56,584 shares on the New York Stock Exchange, indicating active investor interest [5]

Core Insights - McKesson is a diversified health care services leader serving various constituents in the health care sector, including pharmacies, providers, biopharma manufacturers, payers, and patients [4] Group 1: Company Overview - McKesson distributes 33% of pharmaceuticals across North America daily, showcasing its significant market presence [4] - The company has established connections with over 1 million providers and 50,000 pharmacies, indicating a vast operational network [4] - McKesson's USON MSO is projected to touch over 20% of all cancer patients in the U.S. this year, highlighting its impact in oncology care [4]

Summary of McKesson Conference Call Company Overview - **Company**: McKesson - **Industry**: Healthcare Services - **CEO**: Brian Tyler - **CFO**: Britt Vitalone - **Employees**: Approximately 40,000 Core Business Insights - McKesson is a diversified healthcare services leader, distributing 33% of pharmaceuticals in North America daily, with connections to over 50,000 pharmacies and 1 million providers [2][3] - The company focuses on oncology, biopharma services, and core North American distribution, emphasizing a disciplined approach to portfolio optimization and management [3][4] - McKesson's adjusted EPS CAGR over the last five years is 18%, with ROIC more than tripling [4] Financial Performance - Long-term adjusted EPS growth target is set at 13%-16% [5][17] - Adjusted operating profit is expected to grow at 12%-16% [16] - Free cash flow is projected to improve between $500 million and $1 billion [8] - Anticipated adjusted EPS for the current fiscal year is between $28.35 and $28.85 [16] Strategic Priorities - Focus on people and culture to attract and develop talent [5] - Continuous investment in business modernization and performance acceleration [5] - Portfolio optimization through acquisitions and divestitures, including exiting European markets and separating the medical business [6][39] Growth Areas Oncology - McKesson's oncology business has been expanding since 2007, with a network of 3,300 providers supporting over 1.4 million patients [9][10] - The oncology drug market is projected to grow by 60% in the next five years, with over 425 therapies currently available [12] - 41% of clinical trials are focused on oncology, indicating a robust growth opportunity [12] Biopharma Services - The RelayHealth Network connects over 50,000 pharmacies, focusing on affordability solutions [13] - In the past year, McKesson enabled over 100 million patient access instances, providing $10 billion in out-of-pocket savings [14] Prescription Technology Solutions - The business focuses on reducing friction in the prescription process, with a broad set of capabilities including prior authorization and copay assistance [36] - The segment is expected to grow as specialty pharmaceuticals remain the highest growth area within the industry [39] Market Dynamics - The independent pharmacy market remains resilient, with approximately 20,000 independent pharmacies still operational [46] - Price increases for branded drugs are consistent with previous years, while the generics market remains stable [42][43] Capital Allocation - McKesson plans to deploy approximately $2.5 billion in share repurchases by fiscal 2026, with over $6 billion in authorization as of September 2025 [16][17] - The company emphasizes disciplined capital allocation to support future growth and shareholder value [17] Future Outlook - The medical surgical business is expected to be separated, with an IPO planned for the second half of 2027 [39][40] - The company anticipates continued strong performance, with adjusted EPS growth of 16%-18% for the current fiscal year [48] Additional Considerations - The integration of Florida Cancer Specialists and Core Ventures into the US Oncology Network is progressing smoothly, with expected accretion of $0.40-$0.60 in the first year [23][21] - The impact of the IRA on WAC pricing is being managed through ongoing discussions with manufacturers [24][25] This summary encapsulates the key points from the McKesson conference call, highlighting the company's strategic focus, financial performance, growth areas, and market dynamics.

McKesson Corporation J.P. Morgan Healthcare Conference January 13, 2026 Brian Tyler Chief Executive Officer 1 © 2026 McKesson Corporation. All rights reserved. Cautionary Statements Cautionary Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may be identified by their use of terminology such as "believes," "expects," "anticipates," "may," "will," ...

Core Insights - Medical supplies stocks are typically not seen as high-return investments due to thin margins and regulatory pressures, making outperformance unlikely in a challenging macro environment [1] - However, companies like Cardinal Health, McKesson, and Cencora have achieved significant stock returns over the past year, outperforming the broader market with gains of 66.4%, 39.5%, and 42.2% respectively [2] Company Performance Cardinal Health - Cardinal Health has shown a turnaround with double-digit operating earnings growth across all segments in Q1 of fiscal 2026, indicating broad improvement [4][8] - Revenues increased by 22% year over year to $64 billion, driven by strong pharmaceutical demand and GLP-1 volumes, with the Pharmaceutical and Specialty Solutions segment profit rising by 26% [5] - The company is expanding its specialty business, including the acquisition of Solaris Health, aimed at enhancing provider relationships [6][8] - Cardinal Health generated $1.3 billion in adjusted free cash flow and returned $500 million to shareholders through dividends and buybacks [9] McKesson - McKesson reported 10% revenue growth to $103 billion and 39% adjusted EPS growth in Q2 of fiscal 2026, showcasing its operational excellence [11] - The Oncology and Multispecialty segment saw revenues jump by 32% and operating profit surge by 71%, driven by strong specialty volumes and acquisitions [12] - The company generated $2.2 billion in free cash flow and returned $907 million to shareholders, primarily through share repurchases [13] Cencora - Cencora's performance reflects the strength of specialty-focused distribution, with 6% revenue growth and 15% adjusted EPS growth in Q4 of fiscal 2025 [16] - Operating income rose by 20% year over year, supported by strong specialty demand and the acquisition of Retina Consultants of America [17] - The company plans to invest approximately $1 billion through 2030 to enhance distribution capacity and cold-chain infrastructure [18]

Core Insights - McKesson Corporation (MCK) is valued at a market cap of $101.7 billion and operates in healthcare services and information technology, focusing on the distribution of pharmaceuticals and medical supplies, as well as offering healthcare IT solutions [1] Financial Performance - Analysts expect MCK to report a profit of $9.19 per share for fiscal Q3 2026, representing a 14.5% increase from $8.03 per share in the same quarter last year [2] - For fiscal 2026, MCK is projected to report a profit of $38.61 per share, up 16.8% from $33.05 per share in fiscal 2025, with further growth expected to $43.53 per share in fiscal 2027, a year-over-year increase of 12.7% [3] Stock Performance - MCK shares have increased by 38% over the past 52 weeks, significantly outperforming the S&P 500 Index's 17% return and the State Street Health Care Select Sector SPDR ETF's 12.6% increase during the same period [4] - Following the release of impressive Q2 results, MCK's shares surged by 1.7% in the subsequent trading session, with overall revenue rising 10.1% year-over-year to $103.2 billion and adjusted EPS increasing by 39.5% from the previous year [5] Analyst Ratings - Wall Street analysts maintain a highly optimistic outlook on MCK's stock, with a "Strong Buy" rating from 13 out of 17 analysts, while four analysts suggest a "Hold" rating. The mean price target for MCK is $940.94, indicating a potential upside of 15.5% from current levels [6]

Group 1: Lockheed Martin Corporation - Lockheed Martin Corporation (NYSE:LMT) was highlighted as a final trade by Jim Lebenthal, partner at Cerity Partners [1] - Shares of Lockheed Martin rose 2.9% to close at $511.57 following the U.S. operation that seized former Venezuelan president Nicolás Maduro [5] - The company is set to release its fourth-quarter earnings results before the market opens on January 29 [1] Group 2: QXO, Inc. - QXO, Inc. (NYSE:QXO) announced a $1.2 billion convertible offering funded by Apollo, chosen as a final trade by Stephen Weiss, chief investment officer of Short Hills Capital Partners [2] - Shares of QXO jumped 18.2% to settle at $23.30 during the session [5] Group 3: McKesson Corporation - McKesson Corporation (NYSE:MCK) was selected as a final trade by Joe Terranova, senior managing director for Virtus Investment Partners [2] - Barclays analyst Glen Santangelo initiated coverage of McKesson with an Overweight rating and set a price target of $960 [3] - McKesson is expected to report quarterly earnings of $9.28 per share, up from $8.03 per share in the year-ago period, with projected quarterly earnings of $105.98 billion compared to $95.29 billion a year earlier [4] - Shares of McKesson gained 0.2% to close at $824.92 during the session [5]