Headquartered in Hunt Valley, Maryland, McCormick & Company, Incorporated (MKC) is a global leader in the manufacturing, marketing, and distributing of spices, seasonings, and flavorings with a market cap of $20.98 billion. Specializing in flavor solutions, McCormick plays a vital role in enhancing the taste and quality of food products worldwide. The company operates a vast network of production and distribution facilities, serving a diverse customer base that includes consumers, food manufacturers, and the food service industry, providing innovative and reliable flavor solutions for a wide range of culinary needs.
Shares of MKC Industries have underperformed the broader market considerably over the past year. MKC has declined 8.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.1%. However, in 2024, the stock is up 14.2%, compared to the SPX’s 17.3% rise on a YTD basis.
Narrowing the focus, MKC’s underperformance is also evident compared to the Consumer Staples Select Sector SPDR Fund (XLP). The exchange-traded fund has gained 11.2% over this period. However, the ETF’s 12.7% returns on a YTD basis lag behind the stock’s gain over the same time frame.
On Jun. 27, MKC shares rose 4% after the company reported its Q2 results. Its adjusted EPS of $0.69 beat the consensus estimate of $0.59. The company’s revenue stood at $1.64 billion, surpassing Wall Street estimates of $1.63 billion. In addition, MKC reaffirmed its 2024 outlook. It expects adjusted EPS to be between $2.80 and $2.85, compared to $2.70 in 2023, representing an increase of 4% to 6%.
For the current fiscal year, ending in November 2024, analysts expect MKC’s EPS to grow 5.6% year over year to $2.85 on a diluted basis. The company's earnings surprise history is impressive. It beat or matched the consensus estimate in the last four quarters.
Among the 12 analysts covering MKC stock, the consensus rating is a “Hold.” That’s based on four “Strong Buy” ratings, six “Holds,” and two “Strong Sells.”
On Jun. 28, Andrew Lazar from Barclays maintained a “Hold” rating on McCormick & Company, with a price target of $76, which indicates that stock trades at a premium.
The mean price target of $75.83 is also lower than the stock’s current price. However, the Street-high price target of $93 suggests an upside potential of 19.1%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
