Is McCormick Offering Value After Its Recent Share Price Slide in 2025?

• If you are wondering whether McCormick is finally a bargain again or still trading on its spice-aisle brand power rather than real value, you are not alone.
• Despite its defensive reputation, the stock has slipped to about $64.12, with returns of 0.4% over 30 days but still down 15.5% year to date and 15.2% over the last year, hinting at a reset in growth expectations and risk perception.
• Recent headlines have focused on shifting consumer spending, private-label competition, and ongoing cost pressures, all of which have investors questioning how durable McCormick's pricing power really is. At the same time, commentary around supply chain normalisation and gradual margin recovery has kept long term bulls interested, even as the share price has struggled.
• On our checks, McCormick scores a 2/6 valuation score, suggesting pockets of undervaluation but also areas where the stock still looks fully priced. Next, we will walk through those different valuation lenses before finishing with a more complete way to think about what the shares are really worth.

McCormick scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: McCormick Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in dollar terms. For McCormick, the 2 Stage Free Cash Flow to Equity model starts with last twelve months free cash flow of about $618 million and builds up a path of growing cash generation over time.

Analyst and extrapolated forecasts in this model have free cash flow rising toward roughly $1.66 billion by 2035, with mid single digit annual growth applied in the later years of the projection. Simply Wall St uses analyst estimates where available for the next several years and then gradually tapers growth assumptions to create a more conservative long term trajectory.

When all those projected cash flows are discounted back to today, the model points to an intrinsic value of about $122 per share. Compared with the current share price near $64, the DCF output indicates McCormick is trading at roughly a 47.4% discount to its estimated fair value under these assumptions.

Result: UNDERVALUED (based on this DCF model)

Our Discounted Cash Flow (DCF) analysis suggests McCormick is undervalued by 47.4%. Track this in your watchlist or portfolio, or discover 915 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for McCormick.

Approach 2: McCormick Price vs Earnings

For established, profitable companies like McCormick, the Price to Earnings, or PE, ratio is a useful way to gauge how much investors are willing to pay for each dollar of current profits. In general, stronger growth prospects and lower perceived risk justify a higher PE, while slower growth or rising uncertainty usually pull that “normal” or “fair” PE lower.

McCormick currently trades on a PE of about 22.12x, which is a premium to the Food industry average of roughly 20.48x and above the peer group average of about 18.92x. Simply Wall St also calculates a Fair Ratio of around 18.04x, a proprietary estimate of what McCormick’s PE should be based on its earnings growth outlook, profitability, risk profile, industry and market cap. This Fair Ratio goes further than simple peer or industry comparisons because it adjusts for company specific factors rather than assuming all food stocks deserve the same multiple.

Stacking the current PE of 22.12x against the Fair Ratio of 18.04x suggests the shares are trading at a meaningful premium relative to what those fundamentals support, pointing to some overvaluation on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your McCormick Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, an approach on Simply Wall St’s Community page where you connect your view of McCormick’s story to a concrete forecast for its future revenue, earnings and margins. You can then link that to a fair value that you can easily compare with today’s share price to help decide whether to buy, hold or sell. A Narrative is your own investment storyline behind the numbers, and the platform helps you translate that view into a dynamic model that automatically updates when new information like earnings or news arrives. This means your fair value stays in sync with reality rather than fixed at one point in time. For example, one McCormick Narrative might lean bullish, focusing on volume led growth, premiumisation and margin recovery to support a higher fair value and potential upside from the current price. Another might lean cautious, emphasising input cost risks, private label competition and slower regions to support a lower fair value. Narratives allow both perspectives to be clearly expressed, quantified and tracked over time.

Do you think there's more to the story for McCormick? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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