Buy Rating Reaffirmed for McCormick & Company with Increased Price Target Amid Strong Q3 Performance and Positive Outlook

Analyst Peter Galbo from Bank of America Securities reiterated a Buy rating on McCormick & Company (MKC – Research Report) and increased the price target to $96.00 from $95.00.

Peter Galbo has given his Buy rating due to a combination of factors including McCormick & Company’s (MKC) strong performance in the third quarter of 2024 and the company’s raised financial outlook for the fiscal year 2024. The company surpassed analysts’ expectations, showcasing improved gross and operating margins, and is seeing a positive turn in total company volumes, which are expected to continue improving into the fourth quarter. McCormick’s prudent pricing investments and their ongoing benefits further support the optimistic stance. Additionally, the company’s performance in Mexico and a discrete tax benefit contributing to a favorable full-year tax rate underpin the raised earnings per share (EPS) estimates by Galbo.
Galbo’s confidence is further bolstered by his expectation of McCormick delivering a consistent financial performance in fiscal year 2025, excluding mergers and acquisitions. The Buy rating is reaffirmed alongside an elevated price objective of $96, up from $95, reflecting a price-to-earnings (P/E) multiple that aligns with the company’s five-year historical valuation range and acknowledges McCormick’s recovery efforts in China, strategies to boost American consumer volumes, and an improved cost and margin outlook. These factors contribute to the view that McCormick deserves to trade at a P/E multiple that is consistent with its historical average.

Galbo covers the Consumer Defensive sector, focusing on stocks such as Pilgrim’s Pride, Lamb Weston Holdings, and UTZ Brands. According to TipRanks, Galbo has an average return of 1.3% and a 49.18% success rate on recommended stocks.

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McCormick & Company (MKC) Company Description:

Founded in 1889, McCormick & Co., Inc. is a Maryland-based food company, which is engaged in the manufacturing, marketing and distribution of spices, seasoning mixes, condiments and other flavorful products to retail outlets, food manufacturers and foodservice businesses. It operates through the following two segments: Consumer and Flavor Solutions.