McCormick: Near-Term Cost Headwinds Create an Attractive Entry Point Amid Resilient Growth and Compressed Valuation

J.P. Morgan analyst Thomas Palmer has maintained their bullish stance on MKC stock, giving a Buy rating today.

Thomas Palmer has given his Buy rating due to a combination of factors that balance near‑term cost pressures against solid long‑term fundamentals. Despite recent earnings coming in below expectations and management flagging higher costs into 2026, he underscores that McCormick is still delivering improving organic sales growth and has already moved to implement further price increases to protect margins. He highlights that the company operates in attractive categories such as spices and hot sauces, where structural demand and the potential for sustained positive volume growth remain favorable compared with many packaged food peers. He also points to the contribution of growth assets like McCormick de Mexico and an emerging product reformulation cycle across packaged food companies as additional drivers that should help rekindle earnings growth beyond the near term.
At the same time, Palmer acknowledges that he has trimmed his earnings forecasts and reduced his price target, but notes that the stock’s valuation has compressed toward the lower end of its historical multiples. In his view, this de‑rating, combined with McCormick’s long record of growing earnings both organically and through acquisitions, creates an attractive entry point for investors. He expects management’s upcoming update to 2028 objectives to reassure the market that the temporary cost headwinds will not derail the company’s longer‑term earnings trajectory. Overall, the combination of resilient top‑line momentum, credible long‑term growth ambitions, and a now more reasonable valuation underpins his decision to maintain an Overweight/Buy stance on the shares.

In another report released today, TD Cowen also maintained a Buy rating on the stock with a $75.00 price target.

MKC’s price has also changed moderately for the past six months – from $72.500 to $61.200, which is a -15.59% drop .