RBC Capital analyst David Francis said McKesson's agreement to acquire Rexall Health marks a meaningful shift in the company's approach to M&A as he reads it as a sign that McKesson is more willing to directly compete with its "key constituency" of retail pharmacies. Francis reiterates an Outperform rating and $190 price target on McKesson given its long-term strategic position, but cautions that the market may be underestimating the magnitude of earnings contribution from Rite Aid (RAD), which could put consensus earnings expectations at risk in the near-term.
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