McKesson's (MCK) fiscal Q4 update was "more loaded than normal," UBS Securities said in a note Friday, as the company announced plans to spin off its Medical-Surgical Solutions business and issued initial fiscal 2026 guidance broadly in line with expectations.

The company said it will separate the Med-Surg segment into a standalone entity, with further details on timing and structure to follow. UBS said the value creation from the proposed spin is "not immediately clear," as it would likely require the remaining company to trade at a higher earnings multiple to unlock value.

The brokerage characterized McKesson's Q4 results as operationally in line, with better performance in the Pharmaceutical segment offsetting weaker Med-Surg results and most of the upside driven by below-the-line items such as interest and tax rates.

McKesson reported adjusted EPS of $10.12 for fiscal Q4, topping the FactSet consensus of $9.83. Revenue rose to $90.82 billion for the quarter ended March 31, below analyst estimates of $94.30 billion.

The company also introduced fiscal 2026 EPS guidance of $36.75 to $37.55, implying 11% to 14% year-over-year growth. UBS called the guidance in line with both its own forecast and buy-side expectations.

Looking ahead, the firm flagged that near-term stock performance may hinge less on fundamentals and more on regulatory developments, particularly the expected announcement of Most Favored Nation drug pricing rules for Medicare.

McKesson's oncology and MSO businesses could be exposed if the average sales price for Part B drugs are lowered, although UBS expects some relief measures for clinicians.

The firm has a buy rating on the stock with a $805 price target.

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