McCormick & Company (MKC) AI Stock Analysis

• Market Cap: $20.17B
• Dividend Yield: 2.4%
• Average Volume (3M): 2.47M
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.25
• Revenue Growth: 0.89%
• EPS Growth: 4.85%
• Country: US
• Employees: 14,100
• Sector: Consumer Defensive
• Sector Strength: 57
• Industry: Packaged Foods
• EPS (TTM): 0.69
• Shares Outstanding: 253,041,200
• 10 Day Avg. Volume: 2,967,273
• 30 Day Avg. Volume: 2,470,244
• PEG Ratio: -36.72
• Price to Book (P/B): 3.61
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.17
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 0.86
• Enterprise Value/Gross Profit: 8.87
• Enterprise Value/Ebitda: 4.43
• 1Y Price Target: $87.13
• Price Target Upside: 15.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 69 Neutral
• Price Target: $82.00 ▲(9.12%Upside)

McCormick & Company's overall score is primarily driven by its strong financial performance and positive earnings guidance. While technical indicators are neutral and valuation indicates moderate pricing, the company's strategic investments and growth in the consumer segment are significant strengths. Challenges in the Flavor Solutions segment and increased cost pressures are areas to watch.

Positive Factors

Earnings and Guidance

The analyst rates MKC as Outperform and raises the price target, reflecting a positive outlook on the company's future performance.

Financial Performance

The company's adjusted operating profit was $15 million above estimates due to lower SG&A expenses.

Sales Performance

Sales volumes exceeded expectations in both segments, contributing to the company's strong performance.

Negative Factors

Market Concerns

McCormick's stock is down 10% since the start of April, indicating market concerns about the company's prospects.

Tariffs Impact

Tariffs could weigh on McCormick's forward outlook, posing a risk to the company's fiscal year 2025 estimates.

McCormick & Company Business Overview & Revenue Model

Company Description

McCormick & Company, Incorporated (MKC) is a global leader in flavor and spices, providing a wide range of products that enhance the taste of food. Founded in 1889 and headquartered in Hunt Valley, Maryland, McCormick operates in the global food sector, delivering spices, seasoning mixes, condiments, and other flavorful products to consumers, food manufacturers, and foodservice businesses. The company's products can be found in retail outlets, restaurants, and food processing facilities worldwide, serving both the consumer market and industrial clients.

How the Company Makes Money

McCormick & Company generates revenue through the sale of its diverse range of flavor solutions, which include consumer products and industrial flavor solutions. The consumer segment, which targets home cooks and retail customers, offers branded spices, herbs, and seasonings, contributing a significant portion of the company's revenue. The industrial segment provides flavor solutions to food manufacturers and foodservice operators, creating customized flavors, branded foods, and other culinary products tailored to the specific needs of commercial clients. McCormick's revenue streams are bolstered by strategic acquisitions of complementary brands and partnerships with retailers and foodservice providers, which expand its market reach and product offerings.

McCormick & Company Financial Statement Overview

Summary

McCormick & Company shows strong profitability with high gross and net profit margins. Consistent revenue growth and robust operational efficiency are highlighted, though rising debt levels require monitoring. Strong cash flow supports financial health.

Income Statement

McCormick & Company demonstrates strong profitability with impressive gross and net profit margins. The gross profit margin remains consistently high at around 38.6% for TTM, reflecting effective cost management. The net profit margin stands at 11.7% for TTM, showcasing solid bottom-line performance. Revenue growth has been steady with a 5.9% increase from 2022 to 2023, indicating resilient market demand. EBIT and EBITDA margins also indicate robust operational efficiency at 15.7% and 18.6% respectively for TTM.

Balance Sheet

The company's balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.65, suggesting a balanced use of debt and equity financing. Return on equity is healthy at 14.5% for TTM, indicating effective use of shareholder funds. The equity ratio is at 42.1%, which provides a stable financial structure. However, total debt levels have been increasing, which could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis shows a robust free cash flow to net income ratio of 0.87 for TTM, indicating strong cash generation relative to net income. The operating cash flow to net income ratio is 1.15, reflecting efficient cash operations. However, free cash flow growth has been inconsistent, with a decline observed in the most recent period compared to the prior year, which could impact future liquidity if not addressed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.73B	6.72B	6.66B	6.35B	6.32B	5.60B
Gross Profit	2.60B	2.59B	2.50B	2.27B	2.49B	2.30B
EBITDA	1.32B	1.30B	1.21B	1.16B	1.22B	1.18B
Net Income	784.80M	788.50M	680.60M	682.00M	755.30M	747.40M
Balance Sheet
Total Assets	12.90B	13.07B	12.86B	13.12B	12.91B	12.09B
Cash, Cash Equivalents and Short-Term Investments	102.80M	186.10M	166.60M	334.00M	351.70M	423.60M
Total Debt	3.55B	4.51B	4.59B	5.33B	5.39B	5.01B
Total Liabilities	7.45B	7.75B	7.78B	8.43B	8.48B	8.15B
Stockholders Equity	5.42B	5.29B	5.06B	4.68B	4.41B	3.93B
Cash Flow
Free Cash Flow	649.00M	647.00M	973.40M	389.50M	550.30M	816.00M
Operating Cash Flow	899.00M	921.90M	1.24B	651.50M	828.30M	1.04B
Investing Cash Flow	-244.30M	-269.00M	-260.50M	-146.40M	-908.60M	-1.03B
Financing Cash Flow	-670.60M	-583.10M	-1.18B	-487.20M	22.00M	220.90M

McCormick & Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 75.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKC, the sentiment is Negative. The current price of 75.15 is above the 20-day moving average (MA) of 74.51, above the 50-day MA of 74.04, and below the 200-day MA of 76.58, indicating a bearish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 46.08 is Neutral, neither overbought nor oversold. The STOCH value of 32.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MKC.

McCormick & Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MKC	69 Neutral	$20.17B	26.10	14.19%	2.40%	0.89%	4.85%
HRL	68 Neutral	$16.76B	22.41	9.39%	3.81%	-1.01%	-2.93%
CAG	67 Neutral	$10.02B	30.71	3.67%	6.67%	-3.15%	-65.38%
Sector *	65 Neutral	$27.34B	15.36	-4.01%	3.14%	1.00%	1.98%
GIS	63 Neutral	$28.83B	12.97	24.57%	4.51%	-1.87%	-5.16%
CPB	61 Neutral	$9.32B	20.65	11.67%	4.99%	8.65%	-38.57%
CPB	61 Neutral	$9.32B	20.65	11.67%	4.99%	8.65%	-38.57%
SJM	47 Neutral	$11.10B	22.22	-17.87%	4.15%	6.69%	-261.87%

McCormick & Company Corporate Events

Patricia Little to Retire from McCormick’s Board

On January 27, 2025, Patricia Little informed McCormick & Company’s Board of Directors of her intention to retire and not stand for re-election at the next annual stockholders’ meeting scheduled for March 26, 2025. Her departure marks a transition within the company’s governance structure, potentially impacting its strategic direction and stakeholder interests as they prepare for the upcoming meeting.