Hunt Valley, Maryland-based McCormick & Company, Incorporated (MKC) produces, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products. With a market cap of $21.5 billion, the company’s brands reach consumers in more than 150 countries and territories, including Aeroplane Jelly Billy Bee, Brand Aromatics, Cholula Hot Sauce, and more.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and MKC fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the packaged foods industry. The company's well-established brand recognition and extensive global presence have enabled it to maintain a competitive edge. Furthermore, MKC's diverse product portfolio effectively caters to both consumer and commercial markets, providing a solid foundation for sustained growth and success.
Despite its notable strength, MKC slipped 6.1% from its 52-week high of $85.49, achieved on Sept. 16. Over the past three months, MKC stock fell 5%, underperforming the S&P 500 Index’s ($SPX) 7.4% gains during the same time frame.
In the longer term, shares of MKC rose 17.4% on a YTD basis and climbed 20.1% over the past 52 weeks, underperforming SPX’s YTD gains of 26.9% and 28.2% returns over the last year.
To confirm the bullish trend, MKC has been trading above its 200-day moving average since late June. The stock is trading above its 50-day moving average recently.
MKC’s subpar performance can be linked to a downturn in demand and challenging macroenvironment in China that negatively affected its APAC region's volume. Additionally, its strategic decision to divest its canning division and decrease in prices had also impacted its financial performance.
On Oct. 1, MKC shares closed up more than 2% after reporting its Q3 results. Its revenue of $1.68 billion, beat Wall Street forecasts of $1.66 billion. The company’s adjusted EPS was $0.83, surpassing analyst estimates of $0.68. MKC expects full-year adjusted EPS to be between $2.85 and $2.90.
MKC’s rival, General Mills, Inc. (GIS) shares have lagged behind the stock, with a 1.2% uptick on a YTD basis and 1.1% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on MKC’s prospects. The stock has a consensus “Moderate Buy” rating from the 12 analysts covering it, and the mean price target of $86.46 suggests a potential upside of 7.7% from current price levels.
