Analysts remain on the sidelines
Numerous analysts increased their target price on McCormick (MKC) stock following the company’s stronger-than-expected bottom-line performance. UBS increased its target price to $146 from $130. Stifel raised its target price to $145 from $130. Jefferies increased the target price to $165 from $150.
Despite the target price hike, most of the analysts still recommend a “hold” on McCormick stock. McCormick’s top and bottom-line growth are expected to stay low as the company faces a tough YoY (year-over-year) comparison. Currency volatility and the higher tax rate remain a drag on sales earnings.
McCormick’s sales and EPS in the previous year benefited from its acquisition of RB Foods. In the absence of incremental benefits from RB Foods, McCormick’s top and bottom-line growth slowed down. However, sustained momentum in the base business continues to drive the company’s sales and earnings growth.
Rating and target price
Among the 11 analysts, nine recommended a “hold,” while two recommended a “buy.” Analysts have a target price of $146.90 per share, which indicates a downside of 2.9% based on the company’s closing price of $151.21 on April 2.