McKesson Stock Shoots To Record High. Health Products Giant Shows Improved Price Strength

Health care products giant McKesson‘s (MCK) stock broke out of a flat base Tuesday and jumped to a record high. It continued rising Wednesday.

Last quarter Irving, Texas-based McKesson reported a 5% earnings gain to $8.26 per share on a 23% surge in revenue to $97.8 billion. Analyst consensus is for continued double-digit revenue growth the rest of this year, according to FactSet.

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Meanwhile, the Relative Strength (RS) Rating for McKesson stock climbed into a higher percentile as it got a lift from 66 to 79 Wednesday. The upgraded RS Rating puts McKesson stock just one point below the 80 RS Rating that The IBD Methodology investors look for. Decades of market research shows that the market’s biggest winners often have an RS Rating of over 80 as they begin their largest climbs.

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Among its other ratings McKesson has a terrific B+ Accumulation/Distribution Rating and a 91 EPS Rating out of 99. Its Composite Rating is a mild 78. Look for that rating to improve. The best growth stocks have a 90 or higher Composite.

McKesson stock formed a 54-day flat base starting in July. It rose above the 737.89 buy point to a record 748.75 high Tuesday. It continued rising and traded at about 761 Wednesday afternoon.

McKesson is now considered extended and out of buy range after clearing a 709.50 buy point in a first-stage cup with handle. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week moving average.

No. 2 In Its Industry Group

McKesson earns the No. 2 rank among its peers in the Medical-Wholesale Drugs industry group. Rival Cencora (COR) is the No. 1-ranked stock in the six-stock group. The medical wholesale drugs group as a whole ranks a weak 166 on IBD’s list of 197 industry groups.

IBD’s unique RS Rating measures market leadership by showing how a stock’s price action over the last 52 weeks compares to that of the other stocks in our database.

This article was created automatically with Stats Perform’s Wordsmith software using data and article templates supplied by Investor’s Business Daily. An IBD journalist may have edited the article.

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