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Mccormick & Company Inc. (MKC)
NYSE:MKC
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McCormick & Company (MKC) AI Stock Analysis

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MKC

McCormick & Company

(NYSE:MKC)

Rating:69Neutral
Price Target:
$77.00
â–²(8.59% Upside)
McCormick & Company's overall stock score reflects strong financial performance and positive earnings call insights, tempered by technical analysis indicating a bearish trend and valuation concerns. The company's strategic initiatives and stable outlook support a moderately positive assessment, though technical and valuation factors suggest caution.
Positive Factors
Acquisition
The acquisition of an additional 25% stake in the McCormick de Mexico joint venture is viewed favorably due to its minimal impact on MKC's leverage ratio and its positive effect on organic sales growth, operating profit, and earnings per share.
Financial Performance
Analyst is positive on the transaction as it affords MKC additional EBITDA/EPS accretion at a relatively attractive multiple and makes longer-term strategic sense as MKC addresses both geographic and product white space opportunities.
Strategic Growth
The expanded ownership of the joint venture is expected to serve as a platform for growth in Latin America, allowing MKC to manufacture and distribute products more effectively in the region.
Negative Factors
Cost Inflation
The FY26 outlook is dependent on McCormick's ability to raise prices to offset tariff-related cost inflation, which suggests potential challenges if they cannot negotiate successfully with retailers.
Tariffs
The tariff impact on McCormick's ingredient costs is larger than expected, with the current rate representing a 19% tariff compared to the previously estimated 13%.
Taxation
The corporate tax rate in Mexico of 30% is higher than MKC’s guided effective tax rate of 22.5% this fiscal year, which may impact profitability.

McCormick & Company (MKC) vs. SPDR S&P 500 ETF (SPY)

McCormick & Company Business Overview & Revenue Model

Company DescriptionMcCormick & Company, Incorporated manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. It operates in two segments, Consumer and Flavor Solutions. The Consumer segment offers spices, herbs, and seasonings, as well as condiments and sauces, and desserts. This segment markets its products under the McCormick, French's, Frank's RedHot, Lawry's Cholula Hot Sauce, Gourmet Garden, Club House, and OLD BAY brands in the Americas; Ducros, Schwartz, Kamis, and Drogheria & Alimentari, and Vahiné brands in Europe, the Middle East, and Africa; McCormick and DaQiao brands in China; and McCormick, Aeroplane, and Gourmet Garden brands in Australia, as well as markets regional and ethnic brands, such as Zatarain's, Stubb's, Thai Kitchen, and Simply Asia. It also supplies its products under the private labels. This segment serves retailers comprising grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce retailers directly and indirectly through distributors and wholesale foodservice suppliers. The Flavor Solutions segment offers seasoning blends, spices and herbs, condiments, coating systems, and compound flavors to multinational food manufacturers and foodservice customers. It serves foodservice customers directly and indirectly through distributors. The company was founded in 1889 and is headquartered in Hunt Valley, Maryland.
How the Company Makes MoneyMcCormick generates revenue primarily through the sale of its spices, seasonings, and flavor products across its Consumer and Flavor Solutions segments. The Consumer segment earns revenue from retail sales of branded products to grocery chains and supermarkets, while the Flavor Solutions segment derives income from supplying custom flavors and seasonings to food manufacturers and food service industries. Key revenue streams include product sales, particularly in high-demand categories such as organic and gourmet spices, as well as strategic partnerships with major food companies that enhance distribution and market penetration. Additionally, McCormick benefits from ongoing trends toward home cooking and increased interest in diverse flavors, which drive consumer demand for its extensive product lines.

McCormick & Company Key Performance Indicators (KPIs)

Any
Any
Net Sales by Segment
Net Sales by Segment
Chart Insights
Data provided by:Main Street Data

McCormick & Company Earnings Call Summary

Earnings Call Date:Jun 26, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were notable achievements in organic sales growth, consumer segment performance, and effective tariff mitigation plans, challenges remain in the Flavor Solutions segment with volume declines, flat gross profit margin, and geopolitical impacts on EMEA QSR traffic.
Q2-2025 Updates
Positive Updates
Organic Sales Growth
Total organic sales increased by 2% in the second quarter, driven by volume growth, with a 3% increase in the Consumer segment offset by a decline in Flavor Solutions.
Consumer Segment Performance
Consumer organic sales grew by 3% due to volume and mix, with notable volume growth in the Americas and EMEA regions.
Innovation and Distribution Expansion
McCormick continues to focus on innovation and expanding distribution, with new products and increased distribution points contributing to growth.
Operating Income Growth
Adjusted operating income increased by 10%, driven by SG&A savings and CCI initiatives.
Tariff Mitigation Plans
The company has plans to fully offset the impact of current tariff costs for 2025 through sourcing plans and revenue management initiatives.
Negative Updates
Flavor Solutions Volume Decline
Flavor Solutions organic sales were flat, with a 1% decline in volume and mix, primarily driven by softness in CPG customer volumes.
Gross Profit Margin Pressure
Gross profit margin was flat, with increased cost pressure from the global trade environment affecting commodity costs.
QSR Traffic Softness in EMEA
Continued softness in QSR traffic in EMEA, impacted by geopolitical boycotts related to the Middle East conflict.
Cash Flow Reduction
Cash flow from operations decreased to $161 million, compared to $302 million in the prior year, due to higher cash used in working capital timing.
Company Guidance
During the second quarter earnings call, McCormick reported a 2% increase in total organic sales, driven primarily by a more than 3% volume growth in the Consumer segment, although partially offset by declines in Flavor Solutions. The company emphasized its commitment to profitable volume-led growth through brand investment, expanded distribution, innovation, and operational efficiencies. Specific growth was noted across all regions, with a 3% increase in Consumer organic sales in the Americas and EMEA, and a 4% increase in Asia Pacific. McCormick highlighted its ability to mitigate tariff-related costs, which amount to a gross annualized exposure of approximately $90 million, through strategic sourcing and cost-saving initiatives. Despite challenges, the company maintains its 2025 outlook, projecting organic net sales growth between 1% and 3%, and adjusted operating income growth of 4% to 6% in constant currency. The company also noted that 86% of meal occasions are now sourced at home, leading to increased demand for flavorful and healthy meals, aligning with McCormick's strategic positioning.

McCormick & Company Financial Statement Overview

Summary
McCormick & Company demonstrates strong financial performance with solid margins and operational efficiency. The income statement shows consistent revenue growth and profitability, while the balance sheet reflects moderate leverage and a strong equity base. Cash flow management is adequate, though a decline in free cash flow growth highlights areas for improvement.
Income Statement
78
Positive
McCormick & Company shows solid performance in its income statement with a stable gross profit margin of approximately 38.5% TTM and a consistent net profit margin around 11.5% TTM. Revenue growth is moderate, with a 1.3% increase in TTM compared to the previous period. EBIT and EBITDA margins are healthy at 15.8% and 19.7% respectively, indicating operational efficiency. The company is maintaining a strong profitability profile, although the net income has slightly decreased compared to the previous annual report.
Balance Sheet
72
Positive
The balance sheet of McCormick & Company reflects a moderate risk profile with a debt-to-equity ratio of 0.80, indicating moderate leverage. The equity ratio stands at 42.5%, showcasing a solid equity foundation. However, the return on equity is relatively stable at 13.8% TTM, which suggests effective utilization of equity. While debt levels are manageable, further reduction could enhance financial stability.
Cash Flow
70
Positive
The cash flow statement indicates a mixed picture. The operating cash flow to net income ratio is robust at 1.01, demonstrating good cash generation from operations. However, free cash flow growth has declined by 14.7% in TTM, posing a potential concern for future investments. The free cash flow to net income ratio is sound at 0.71, suggesting reasonable cash conversion. Overall, cash flow management remains adequate, though improvements could bolster financial flexibility.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue6.74B6.72B6.66B6.35B6.32B5.60B
Gross Profit2.60B2.59B2.50B2.27B2.49B2.30B
EBITDA1.32B1.32B1.21B1.16B1.22B1.18B
Net Income775.60M788.50M680.60M682.00M755.30M747.40M
Balance Sheet
Total Assets13.19B13.07B12.86B13.12B12.91B12.09B
Cash, Cash Equivalents and Short-Term Investments124.10M186.10M166.60M334.00M351.70M423.60M
Total Debt4.45B4.51B4.59B5.33B5.39B5.01B
Total Liabilities7.56B7.75B7.78B8.43B8.48B8.15B
Stockholders Equity5.60B5.29B5.06B4.68B4.41B3.93B
Cash Flow
Free Cash Flow551.80M647.00M973.40M389.50M550.30M816.00M
Operating Cash Flow781.80M921.90M1.24B651.50M828.30M1.04B
Investing Cash Flow-244.10M-269.00M-260.50M-146.40M-908.60M-1.03B
Financing Cash Flow-553.80M-583.10M-1.18B-487.20M22.00M220.90M

McCormick & Company Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price70.91
Price Trends
50DMA
71.45
Negative
100DMA
72.71
Negative
200DMA
74.93
Negative
Market Momentum
MACD
-0.25
Negative
RSI
52.08
Neutral
STOCH
49.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKC, the sentiment is Neutral. The current price of 70.91 is above the 20-day moving average (MA) of 70.09, below the 50-day MA of 71.45, and below the 200-day MA of 74.93, indicating a neutral trend. The MACD of -0.25 indicates Negative momentum. The RSI at 52.08 is Neutral, neither overbought nor oversold. The STOCH value of 49.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MKC.

McCormick & Company Risk Analysis

McCormick & Company disclosed 33 risk factors in its most recent earnings report. McCormick & Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

McCormick & Company Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$27.04B12.3424.57%4.76%-1.87%-5.16%
72
Outperform
$9.21B8.0313.27%7.26%-3.64%231.77%
69
Neutral
$19.03B24.6214.19%2.50%0.89%4.85%
69
Neutral
$10.15B16.9315.64%4.53%6.40%6.17%
63
Neutral
$14.11B18.719.46%4.49%0.65%-3.76%
63
Neutral
$20.52B14.80-2.68%3.09%1.95%-4.76%
55
Neutral
$12.00B22.22-21.32%3.86%2.54%-293.39%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MKC
McCormick & Company
70.91
-10.44
-12.83%
CPB
Campbell Soup
34.03
-15.71
-31.58%
CAG
Conagra Brands
19.28
-11.69
-37.75%
GIS
General Mills
50.58
-21.58
-29.91%
HRL
Hormel Foods
25.66
-5.53
-17.73%
SJM
JM Smucker
112.51
-2.99
-2.59%

McCormick & Company Corporate Events

M&A TransactionsBusiness Operations and Strategy
McCormick Expands Stake in Mexican Subsidiary
Positive
Aug 21, 2025

On August 21, 2025, McCormick & Company announced a definitive agreement to acquire an additional 25% ownership in McCormick de Mexico for $750 million, increasing its stake to 75%. This acquisition aims to enhance McCormick’s market leadership in Mexico’s condiment and sauce sector and provides a strategic platform for expansion across Latin America. The transaction is expected to be accretive to McCormick’s net sales, operating margin, and earnings per share in the first year, while leveraging the strong brand loyalty and market presence of McCormick de Mexico.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 21, 2025