McCormick & Company, Incorporated (NYSE:MKC) Annual Results: Here's What Analysts Are Forecasting For This Year

It's been a good week for McCormick & Company, Incorporated (NYSE:MKC) shareholders, because the company has just released its latest yearly results, and the shares gained 6.2% to US$69.08. Results were roughly in line with estimates, with revenues of US$6.7b and statutory earnings per share of US$2.52. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for McCormick

Taking into account the latest results, McCormick's 15 analysts currently expect revenues in 2024 to be US$6.74b, approximately in line with the last 12 months. Per-share earnings are expected to swell 13% to US$2.88. In the lead-up to this report, the analysts had been modelling revenues of US$6.89b and earnings per share (EPS) of US$2.89 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at US$72.03even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on McCormick, with the most bullish analyst valuing it at US$87.00 and the most bearish at US$57.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that McCormick's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 5.4% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that McCormick is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on McCormick. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for McCormick going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with McCormick .

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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.