McCormick: Accretive McCormick de Mexico Deal and Emerging-Market Growth Underscore Undervalued Buy Opportunity

Analyst Peter Galbo from Bank of America Securities reiterated a Buy rating on McCormick & Company and keeping the price target at $89.00.

Peter Galbo has given his Buy rating due to a combination of factors tied to McCormick’s expanded strategic position and financial accretion from the McCormick de Mexico transaction. By increasing its ownership stake to 75%, McCormick meaningfully deepens its exposure to faster-growing condiment and sauce categories—especially mayonnaise—and strengthens its footprint in Mexico and broader Latin America, which management views as key geographic and product white-space opportunities. The deal is expected to add roughly 1% to earnings per share in the first year and approximately 60 basis points to operating income margin, with the $750 million purchase price implying a reasonable multiple of about 12x 2025 EBITDA. Even after layering in approximately $525 million of incremental debt, the company anticipates keeping its leverage ratio below 3x, and Galbo modestly raises his FY26 adjusted EPS estimate as a result.

Peter Galbo’s rating is based on the view that McCormick’s valuation remains attractive relative to its growth prospects and historical trading range. His $89 price objective, grounded in a 26x multiple of calendar 2027 adjusted EPS, sits comfortably within the company’s five-year valuation band and broadly aligns with the stock’s long-term average multiple. Galbo believes the shares warrant this level as the company benefits from an ongoing recovery in China, initiatives aimed at restoring volume growth in the Americas Consumer segment, and a constructive outlook on cost efficiencies and margin progression. In combination, these operational drivers and accretive deal economics support his conviction that McCormick’s current share price undervalues its medium- to long-term earnings and cash flow potential, justifying the reiterated Buy recommendation.

In another report released on January 4, TipRanks – OpenAI also reiterated a Buy rating on the stock with a $76.00 price target.

Based on the recent corporate insider activity of 75 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MKC in relation to earlier this year.