Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - TD Cowen has reduced its price target on McCormick & Company (NYSE:MKC) to $82.00 from $85.00 while maintaining a Buy rating on the stock.
The adjustment reflects TD Cowen’s revised fiscal year 2026 earnings per share estimate for McCormick, now projecting 7% growth to $3.25, below the consensus estimate of $3.31. This reduction comes in anticipation of increased tariff impact costs. InvestingPro analysis shows 8 analysts have recently revised their earnings downward, with the stock trading at a P/E ratio of 24.12, considered high relative to its near-term earnings growth potential.
TD Cowen expects McCormick’s annual tariff costs to rise to $127 million from the company’s previous guidance of $90 million. The firm noted that McCormick management recently acknowledged challenges in achieving their normal algorithm of 9-11% EPS growth next year. For deeper insights into McCormick’s financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
According to TD Cowen’s analysis, the current tariff rate represents a 19% levy on McCormick’s ingredient costs, compared to the blended 13% rate that management likely estimated when quantifying $90 million in tariff costs during their second-quarter call.
The firm pointed out that McCormick’s initial estimate assumed a 30% tariff for China, 0% for Mexico/Canada, and 10% for all other countries, but the administration has since implemented a 20% tariff on Vietnam, 25% on India, and 50% on Brazil.
In other recent news, McCormick & Company reported its second-quarter earnings for 2025, surpassing analysts’ expectations with an adjusted earnings per share of $0.69, compared to the forecast of $0.66. The company met revenue expectations, reporting $1.66 billion. Despite concerns about tariff impacts on its global supply chain, McCormick reiterated its full-year 2025 guidance. UBS maintained a Neutral rating on McCormick, with a price target of $83, noting the company’s strong performance in the Consumer segment, which saw over 3% growth in volume and mix. Meanwhile, Bernstein raised its price target for McCormick to $102 from $101, describing the company’s second-quarter results as solid. These developments reflect a positive sentiment in the market, highlighted by McCormick’s strategic initiatives and robust performance in key segments.
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