Following nearly a decade of problems after its ill-fated merger with HBOC, the outlook is getting better for McKesson, argues Standard & Poors Equity Research. Standard & Poors rates McKesson a "strong buy" largely due to the expected business the company is projected to win as a result of the new Medicare drug benefit and the trend toward generic drugs. The research group also sees increased demand for McKesson software from its Provider Technologies division--the old HBOC. McKesson Provider Technologies has been acquiring new technology companies, such as Medcon, and also has been successfully integrating its IT offerings with the rest of its pharmaceutical and materials supply chain activities. That was the original logic behind the merger, de-railed, of course, by the accounting fraud at HBOC that is still to work its way through the courts. McKesson stock is up dramatically in the past year, but is still only at 60 percent of the level it was at before the crisis in 1999.
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