McCormick stock gains control in Mexican venture as TD Cowen reiterates Buy

Investing.com - McCormick & Company (NYSE:MKC) is increasing its ownership stake in its Mexican joint venture with Grupo Herdez (BMV:HERDEZ) from 50% to 75%, according to TD Cowen.

TD Cowen has reiterated its Buy rating on McCormick with an $82.00 price target, viewing the increased stake as "a good use of capital" that supports the firm’s positive outlook on the stock. According to InvestingPro, McCormick has maintained an impressive track record of raising its dividend for 39 consecutive years, demonstrating strong financial stability.

The investment will provide McCormick with a greater share of the economics from what TD Cowen describes as "a highly successful business" in Mexico.

The transaction is expected to create more options for McCormick to expand in the region, furthering its growth opportunities in the Mexican market.

TD Cowen projects the deal will provide approximately 1% EPS accretion to McCormick in fiscal year 2026, adding a modest but positive financial impact to the company’s future earnings. The company currently trades at a P/E ratio of 24.6, reflecting market confidence in its growth strategy.

In other recent news, McCormick & Company has announced plans to acquire an additional 25% stake in its Mexican unit, McCormick de Mexico, from Grupo Herdez for $750 million. This transaction will increase McCormick’s ownership to 75% and is expected to close in early 2026, subject to customary conditions. The acquisition will be financed through a combination of cash and debt and represents an acquisition multiple of approximately 12 times the 2025 EBITDA. Meanwhile, UBS has lowered its price target for McCormick to $79.00 from $83.00, citing concerns about the company’s Flavor Solutions segment and shifting tariff dynamics, while maintaining a Neutral rating. In contrast, JPMorgan has upgraded McCormick’s stock from Underweight to Overweight, raising its price target to $83.00, viewing the recent pullback in shares as an attractive entry point. Additionally, TD Cowen has reduced its price target to $82.00 from $85.00, reflecting revised fiscal year 2026 earnings per share estimates due to anticipated tariff impacts. These developments reflect a mix of strategic moves and varied analyst perspectives on McCormick’s future performance.

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