Strong quarter fails to ease inflation worries for McCormick
MKC•McCormick beat third-quarter results as higher prices helped offset softer demand, but brokerages cited inflation and weaker consumer demand as risks. The median price target from 16 brokerages was $55.
1. Inflation clouds outlook
McCormick beat third-quarter results, with higher prices for seasonings and sauces helping offset softer demand linked to elevated gas prices and a cyclospora outbreak that weighed on volumes.
2. Brokerage views
J.P. Morgan said inflation is rising faster than expected and cooling sentiment toward McCormick shares, while remaining constructive on long-term value creation from the pending Unilever Foods combination. Barclays said the company remains on track to meet annual targets, though softer consumer demand, weaker foodservice activity and rising costs make that path more challenging.
3. Volume and earnings risks
Stifel cited a slower-than-expected volume recovery in the Americas and higher inflation despite strong third-quarter cost savings and profit growth. TD Cowen said productivity savings and pockets of international strength helped offset weak Americas demand, but inflation and consumer pressure are raising risks to fiscal 2027 earnings and the combined company's longer-term growth outlook.
