Revenue and EPS estimates
McCormick & Company (MKC) will be reporting its fiscal 2015 fourth quarter results on January 28, 2016. The analysts’ estimate for revenue is $1.2 billion, a rise of 1.6% compared to the year-ago quarter. The EPS (earnings per share) are also expected to rise slightly to $1.17 per share in fiscal 4Q15. The margins are also expected to improve slightly this quarter.
Stock performance since last quarter’s earnings
On October 1, 2015, McCormick reported financial results for fiscal 3Q15. Note that the quarter ended on August 31, 2015. MKC stock fell ~4% following the earnings release, closing at $78.7. The stock had been on an upward trend until then, trading in the range of $79–$83 in September.
The stock, however, started rising again after falling 4% and has been trading in the range of $81–$87 in the last two months. The price movement on a year-to-date basis is -6.7%, and it’s trading at -6% on a trailing-five-day basis. The stock has gained 8% in 2015 as of January 21. On January 19, JPMorgan Chase downgraded McCormick from “neutral” to “underweight.” The price target was reduced from $82 to $76 per share in the belief that earnings expectations and valuations are high. The stock closed lower by 3% on the same day, closing at $81.3. It closed at $80.0 on January 21.
Peers in the industry
McCormick manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry worldwide. It has its headquarters in Sparks, Maryland.
Its main competitors in the processed and packaged goods industry are Mondelez International (MDLZ), Cal-Maine Foods (CALM), and Campbell Soup (CPB). They closed at $40.3, $48.9, and $54.1, respectively, on January 21. Also, the PowerShares Dynamic Food and Beverage ETF (PBJ) invests 2.8% of its portfolio in the MKC stock. The ETF also makes up for 5.2% of the MDLZ stock, 2.4% of CALM, and 2.7% of CPB. The ETF closed at $30.3 on January 21 and has returned 6% year-to-date.
In the next parts of the series, we ‘ll talk about the moving averages of McCormick and its peers, and the company’s performance in its last reported third quarter of fiscal 2015. We’ll also discuss how its segments contributed to its performance, as well as its raised dividend and fiscal 2015 guidance.