Hunt Valley, Maryland-based McCormick & Company, Incorporated (MKC) is a leader in the spice and seasoning market. With a market capitalization of $20.6 billion, it provides a range of products under well-known brands such as McCormick, French’s, Frank’s RedHot, Cholula Hot Sauce, and OLD BAY.
Market Performance Overview
Over the past year, MKC has lagged behind the broader market. The stock has increased by 18.4%, while the S&P 500 Index ($SPX) has surged nearly 22.3%. Even in 2025, MKC has seen a slight rise, compared to SPX’s 4% gain on a year-to-date basis.
Comparison with Food & Beverage Sector
When comparing MKC to the First Trust Nasdaq Food & Beverage ETF (FTXG), the difference is clear. The ETF has dropped about 4% over the past year. MKC’s slight gains this year stand in contrast to FTXG’s 3.1% losses.
Challenges Affecting Performance
The company’s stock struggles can be attributed to lower sales in China, increased operational costs, fluctuations in currency, and ongoing inflation. These challenges have been compounded by economic uncertainties and geopolitical issues that have impacted the supply chain. Additionally, MKC’s choice to exit low-margin businesses has resulted in reduced volume for 2024. The current climate of cautious consumer spending is also affecting the growth potential in higher-margin products.
Recent Financial Results and Forecast
On January 23, MKC shares rose over 2% following the release of its Q4 results. It reported adjusted earnings per share (EPS) of $0.80, exceeding Wall Street’s estimate of $0.77. The company generated $1.80 billion in revenue, surpassing forecasts of $1.77 billion. Looking ahead to fiscal 2025, MKC projects adjusted EPS between $3.03 and $3.08.
Analyst Ratings and Price Targets
For fiscal 2025, which concludes in November, analysts anticipate a 4.1% growth in MKC’s EPS to $3.07 on a diluted basis. The company boasts a solid track record, having exceeded consensus estimates in each of its last four quarters. Currently, among 12 analysts, the consensus rating is a “Moderate Buy,” which includes seven “Strong Buy” ratings, four “Holds,” and one “Strong Sell.”
This outlook is more optimistic compared to two months ago, where only six analysts recommended a “Strong Buy.”
On January 27, Barclays PLC (BCS) maintained an “Equal-Weight” rating on MKC and adjusted the price target to $82, indicating a potential rise of 6.5% from current levels. The average price target sits at $84.31, suggesting a 9.6% upside to MKC’s current price. The highest projection from analysts stands at $96, indicating a potential increase of 24.7%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
