Update shared on 01 Dec 2025
McCormick's analyst price targets were recently lowered by amounts ranging from $1 to $9 across several firms, as analysts cite concerns over rising tariffs, higher input costs, and uncertainty regarding 2026 price elasticity and profitability outlooks, despite ongoing volume-led sales growth.
Analyst Commentary
Bullish Takeaways- Bullish analysts highlight continued volume-led growth and resilience across key categories, even in a challenging consumer environment.
- The Consumer segment demonstrated stronger performance compared to other business areas. This supports ongoing top-line expansion and market share.
- Expectations remain positive for the forthcoming holiday quarter, with gross margins forecast to improve and topline momentum anticipated during this important sales period.
- Some analysts note that although the outlook has been adjusted, the company's exposure to tariffs and input costs is viewed as manageable in the medium term.
- Bearish analysts express concern over a trimmed profitability outlook, citing persistent increases in commodity costs and incremental tariffs weighing on adjusted margins.
- Uncertainty remains regarding the degree of price elasticity into 2026, suggesting potential vulnerability to consumer pushback on future pricing actions.
- The company's Flavor Solutions segment continues to face pressure, with sluggish performance as larger consumer goods companies see ongoing sales declines.
- The range of potential outcomes for fiscal 2026 is considered wider than before, particularly due to external pressures and variance in execution.
What's in the News
- McCormick's Board of Directors declared an increased quarterly dividend from $0.45 to $0.48 per share, marking the 102nd year of continuous dividends and 40th consecutive annual increase. The dividend is payable January 2026. (Company Statement)
- The McCormick brand launched a bold collaboration with Huer and Frank's RedHot for Spicy Gummy Bears to capitalize on the rising popularity of "swicy" (sweet and spicy) flavors. These are now available at major retailers and online. (Company Announcement)
- McCormick is partnering with Milk Bar chef Christina Tosi to offer limited-edition Eggnog English To coffee Cookies for the holiday season. National Cookie Day giveaways and festive promotions will take place at Milk Bar locations. (Company Announcement)
- The McCormick Gourmet Collection has received its first major packaging redesign in over 30 years, with a focus on premium ingredients, sustainability, and appeal to Millennial and Gen Z home cooks. (Company Announcement)
- McCormick updated its 2025 financial outlook, lowering EPS growth projections while reaffirming net sales growth guidance. (Company Statement)
Valuation Changes
- Fair Value: Remained unchanged at $76.92 per share, indicating stability in the overall valuation assessment.
- Discount Rate: Decreased slightly from 6.96% to 6.96%, reflecting a marginal reduction in perceived risk or cost of capital.
- Revenue Growth: Maintained at 4.65%, showing consistency in forward-looking revenue expectations.
- Net Profit Margin: Stable at approximately 12.79%, with no material changes to profitability assumptions.
- Future P/E: Unchanged at 25.44x, suggesting steady expectations for forward earnings multiples.
Disclaimer
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