Using the PEG framework with analyst consensus forward EPS growth of 21.5% plus 0.3% dividend yield, McKesson Corporation has a fair value of $838.70 based on NTM EPS (FY2026) of $39.02. The current PEG ratio is 1.03.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG is most informative for high-growth companies — the PEG sweet spot.
| EPS Growth RateForward | 21.2% |
| Dividend Yield | +0.3% |
| Adjusted Growth (clamped 8–25%) | 21.5% |
| Fair P/E | 21.5x |
| NTM EPS (FY2026) | $39.02 |
| Fair Value | $838.70 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $25.72 | — | — |
| FY2026E | $39.02 | +51.7% | 12 |
| FY2027E | $44.26 | +13.4% | 12 |
| FY2028E | $50.00 | +13.0% | 12 |
| FY2029E | $57.69 | +15.4% | 11 |
| FY2030E | $67.19 | +16.5% | 6 |
5Y Forward EPS CAGR: 21.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $-4.5B | $-27.02 | — |
| FY2022 | $1.1B | $7.23 | — |
| FY2023 | $3.6B | $25.04 | +246.3% |
| FY2024 | $3.0B | $22.39 | -10.6% |
| FY2025 | $3.3B | $25.72 | +14.9% |
4Y Historical EPS CAGR: 83.5%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.