Moody's lifts several ratings for McKesson
Moody's Investors Services on Monday raised several ratings for McKesson Corp., citing the drug distributor's improved operating margins and the company's conservative stance toward its finances and acquisitions.
The ratings agency upgraded McKesson's senior unsecured notes and its backed industrial revenue bonds to "Baa2" from "Baa3," and its short-term rating to "Prime-2" from "Prime-3."
Moody's outlook on McKesson is "stable."
The action reflects Moody's expectation that the San Francisco-based company will continue to pursue a measured approach to acquisitions and company stock buybacks.
And even if McKesson takes on additional debt, it should be able to sustain solid credit, Moody's said.
"McKesson has demonstrated its ability to raise operating margins even within a challenging economic environment," said Diana Lee, a senior credit officer at Moody's.
Lee noted McKesson benefits from a higher-margin information technology business that should see recovery thanks to government incentives and higher spending by hospitals.
Moody's also lifted the ratings for McKesson's senior shelf to "(P)Baa2" from "(P)Baa3," and the subordinated shelf, senior subordinated shelf and junior subordinated shelf to "(P)Baa3" from "(P)Ba1."
It also raised its rating for the company's preferred shelf to "(P)Ba1" from "(P)Ba2."
McKesson shares slipped 36 cents to $69.73 in afternoon trading.