UBS Maintains Hold Rating on McCormick Amid Short-Term Challenges and Long-Term Growth Potential

, an analyst from UBS, has initiated a new Hold rating on McCormick & Company (MKC).

UBS has given its Hold rating due to a combination of factors impacting McCormick & Company’s performance. The firm acknowledges that McCormick is positioned to achieve low single-digit volume growth driven by an increase in home cooking and a growing interest in spices. However, UBS notes potential short-term challenges, such as softer top-line trends and the impact of tariffs, which have not yet been fully accounted for in estimates.
In the near term, UBS foresees a slight downside in sales expectations due to muted growth in the Consumer Segment and weaker prospects in Flavor Solutions. Despite this, the long-term growth projections align with consensus, suggesting McCormick can sustain a 3-4% organic growth rate. Profitability remains uncertain, as margin expansion depends on volume leverage amidst a challenging environment. UBS’s valuation reflects a historical premium justified by McCormick’s growth potential, with a price target set at $83, indicating a 10% upside.