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Investing.com - UBS lowered its price target on McCormick & Company (NYSE:MKC) to $79.00 from $83.00 on Friday, while maintaining a Neutral rating on the stock.
The price target reduction comes as UBS expressed concerns about headwinds in the company’s Flavor Solutions segment and uncertainty surrounding shifting tariff dynamics, despite acknowledging McCormick’s solid capital deployment. The company maintains a FAIR financial health score according to InvestingPro, with a moderate debt level and consistent dividend payments for 55 consecutive years.
UBS noted that McCormick is increasing its exposure to a region with growing per capita consumption in both units and dollars across the company’s core categories, which is expected to be accretive to earnings.
The firm slightly raised its FY26/FY27 earnings estimates for McCormick, but indicated that market estimates still call for high-single-digit EPS growth and more than 3% organic growth in FY26 despite the ongoing challenges.
UBS believes that despite McCormick’s attractive valuation at below 22x P/E, improved fundamental performance will be necessary to drive multiple expansion, leading the firm to maintain its cautious stance until there is greater confidence that near-term targets are achievable.
In other recent news, McCormick & Company has announced plans to acquire an additional 25% stake in McCormick de Mexico from Grupo Herdez (BMV:HERDEZ) for $750 million. This acquisition will increase McCormick’s ownership in the Mexican unit to 75% and is expected to close in early 2026, pending customary closing and regulatory conditions. The deal will be financed through a combination of cash and debt. Meanwhile, JPMorgan has upgraded McCormick’s stock from Underweight to Overweight, citing growth prospects and setting a new price target of $83.00. TD Cowen has lowered its price target for McCormick to $82.00 due to anticipated tariff impact costs, although it maintains a Buy rating on the stock. Bernstein has raised its price target to $102.00, following McCormick’s solid second-quarter 2025 results and the company’s reaffirmation of its full-year guidance. These developments highlight McCormick’s ongoing strategic moves and the varied perspectives from financial analysts on its future performance.
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