Investment firm Stifel has lowered its price target for McCormick & Company (NYSE: MKC) to $65 per share from its previous estimate of $71, while upholding a Hold recommendation on the stock. This adjustment follows the spice and flavor producer’s release of its fourth-quarter financial results, which revealed earnings per share of $0.86. This figure came in below Stifel’s forecast by $0.01 and missed broader consensus estimates by $0.02, primarily due to costs exceeding initial projections.
Data from InvestingPro indicates a trend of earnings downgrades among analysts, as three have recently lowered their forecasts for McCormick’s upcoming period. Nonetheless, the company remains profitable, reporting a trailing twelve-month earnings per share of $2.94.
Amid inflationary pressures, McCormick has sustained positive momentum in its top-line performance with a slight increase in sales volume during the quarter. This marks the sixth consecutive quarter where volume growth has been recorded. Stifel observes that this pattern is distinct compared to other companies in the packaged foods sector and attributes it to McCormick's strategic positioning in its market segment as well as investments made in pricing strategies, product innovation, and expanded distribution channels.
Over the past twelve months, McCormick achieved 1.7% revenue growth, translating to total revenues of $6.84 billion. Looking ahead, the company’s guidance for fiscal year 2026 anticipates earnings per share growth on a constant currency basis between 1% and 4%. This forecast is approximately 2-3% below the consensus projections among analysts. Stifel notes that this lower outlook is largely influenced by ongoing inflationary challenges, faster-than-expected enterprise resource planning (ERP) expenses, an increased tax burden, and enhanced incentive compensation rebuilds.
Despite these headwinds, Stifel signals that sustained volume growth and potential margin enhancements — as price adjustments take effect — may offer upward potential for McCormick's share price in the near future.
In related developments, McCormick’s reported earnings per share for the fourth quarter of 2025 stood at $0.86, slightly underperforming the forecasted $0.87. However, the company exceeded revenue expectations by generating $1.85 billion against an anticipated $1.84 billion. This mixed financial performance led to a tepid reaction from the market.
In response to these results and the company’s fiscal 2026 outlook, TD Cowen trimmed its price target for McCormick from $82 down to $75, although it maintained a Buy rating on the stock. Analyst Robert Moskow from TD Cowen highlighted that increased costs were a significant factor influencing the downward adjustment. These factors underscore the ongoing operational and financial challenges McCormick faces amidst the prevailing economic environment.