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McCormick Crushed Its Fiscal 3Q17 Estimates, Stock Rose

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Part 6
McCormick Crushed Its Fiscal 3Q17 Estimates, Stock Rose PART 6 OF 7

Will Analysts Raise the Target Price on McCormick Stock?

Analysts’ recommendations and target price

Most of the analysts that provide ratings on McCormick (MKC) stock continue to have a “neutral” outlook. Analysts have given McCormick stock a score of 2.8. A score of 1.0 means a “strong buy” and 5.0 implies a “strong sell.” It’s important to note that 71% of the analysts recommended a “hold,” 22% maintained a “buy” rating, and 7% recommended a “sell.”

McCormick stock closed at $101.65 on September 28, 2017, which is almost at par with analysts’ 12-month target price of $102.15 per share.

Will Analysts Raise the Target Price on McCormick Stock?

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In comparison, analysts are confident about Conagra Brands (CAG) and Kraft Heinz (KHC) stock. Most of the analysts maintained a “buy” on these stocks. Analysts continue to maintain a “neutral” outlook on Kellogg (K), General Mills (GIS), and J.M. Smucker (SJM) stock.

Why McCormick’s target price might rise

McCormick is projected to report strong sales on the back of new product launches, acquisitions, and growth in namesake brands. Higher cost savings are expected to supplement its bottom-line growth.

The company is outperforming its peers on the sales and profitability front. It’s estimated to finish the current fiscal year on a higher note, which should cause analysts to raise the target price on McCormick stock.

Following the company’s strong fiscal 3Q17 results, Credit Suisse raised its target price on McCormick stock to $115.00 from $112.00 and maintained its “outperform” rating.

However, the company’s high debt position, a threat from private label players, and challenges in the United Kingdom make investors cautious.

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