AnalystConsensusTarget updated the narrative for MKC

McCormick's fair value estimate has been reduced by approximately $5 to $77.38, as analysts cite headwinds from rising tariffs, elevated commodity costs, and questions regarding future profit margins and revenue growth.

Analyst Commentary

Wall Street analysts have reacted to McCormick's recent results and outlook with a host of both positive and negative considerations, leading to a number of price target revisions and ratings changes across the sector.

• Bullish analysts highlight resilient category strength, with volume-led growth sustained despite a challenging macroeconomic environment.
• Long-term outlooks remain positive for McCormick as a structural winner in the food space, due to its favorable category and geographic exposure. This suggests the company's fundamentals support future growth.
• Expectations for a solid holiday season and potential margin improvement in the upcoming quarter provide optimism for near-term performance recovery.
• The recent share price pullback is viewed by some as an attractive entry point, enhancing the stock's value proposition relative to longer-term growth prospects.

• Bearish analysts express concern over ongoing headwinds, including persistent input cost inflation and the impact of incremental tariffs on margins and earnings visibility.
• Mixed results in business segments, particularly ongoing pressure in the Flavor Solutions division, are weighing on confidence in the company’s ability to deliver consistent growth.
• The outlook for 2026 remains uncertain, with a wide range of potential outcomes being forecast as analysts debate the effects of price elasticity and consumer spending patterns.
• Weaker consumption trends across the sector and expectations for declining earnings per share raise caution, with some suggesting investors remain selective in food sector exposure.

What's in the News

• Stifel lowered McCormick's price target to $76 from $82, maintaining a Hold rating. The firm cited ongoing weak consumption trends and advised caution for food sector investors (Periodicals).
• McCormick updated its 2025 financial guidance, now expecting earnings per share between $2.95 and $3.00, which is below previous projections. The company also slightly lowered its operating income growth forecasts (Key Developments).
• Huer Foods and Frank’s RedHot launched Spicy Gummy Bears, a unique collaboration combining sweet gummy bears with hot sauce to address rising demand for "swicy" flavors among Canadian consumers (Key Developments).
• McCormick is expanding its seasonal Finishing Sugars collection by introducing new fall and winter flavors to enhance desserts and beverages during the holiday season (Key Developments).

Valuation Changes

• The Fair Value Estimate has decreased by about $5 to $77.38, reflecting a moderate reduction in the company's perceived intrinsic worth.
• Revenue growth projections have declined slightly, moving from 4.89% to 4.62%.
• The Net Profit Margin is now expected at 12.83%, down from the previous estimate of 13.25%.
• The future P/E Ratio has been revised downward to 25.42x from 26.10x.
• The Discount Rate remains unchanged at 6.78%.