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UBS initiated coverage on McCormick & Company (NYSE:MKC) Monday with a neutral rating and a price target of $83.00.
The research firm expects McCormick to deliver low-single-digit volume growth, which it describes as "best-in-class" within the packaged food sector. UBS cites several secular tailwinds supporting this growth, including increased home cooking and growing consumer interest in spicy flavors. The company’s revenue growth forecast for fiscal 2025 stands at 1%, while maintaining a healthy gross profit margin of 38.6%.
Despite these positive long-term trends, UBS sees "modest downside" to near-term financial projections. The firm notes that McCormick’s current sales trends remain softer than expected, and market estimates have not fully accounted for potential tariff impacts.
UBS set its fiscal year 2025 and 2026 earnings per share estimates approximately 1% below the current Wall Street consensus forecasts for the spice and flavoring company.
The investment bank observed that McCormick shares currently trade at a slight discount to their historical levels compared to other packaged food peers, suggesting current challenges are largely reflected in the stock price.
In other recent news, McCormick & Company has announced the planned retirement of its Chief Growth Officer, Kasey Jenkins, in early 2026. Jenkins, who has been with McCormick for over three decades, will transition her responsibilities to other senior leaders throughout 2025. At the company’s Annual Meeting of Stockholders, McCormick shareholders approved executive compensation and elected eleven directors to the board, with Ernst & Young LLP ratified as the independent auditor for the upcoming fiscal year. Meanwhile, Bernstein analysts have maintained an Outperform rating on McCormick, with an increased stock price target of $101.00, citing a reformulation trend in the U.S. packaged foods industry that could benefit the company. In contrast, Argus analysts downgraded McCormick’s rating from "Buy" to "Hold," expressing concerns over potential impacts from weakened restaurant foot traffic and rising input costs on future earnings growth. Despite these challenges, McCormick’s Flavor Solutions segment showed signs of recovery with a 3.3% organic sales growth. Bernstein’s positive outlook is supported by expectations of improved profit growth in upcoming quarters, while Argus remains optimistic about McCormick’s long-term prospects due to ongoing cost control and productivity measures.
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