mccormick earnings stock split
Source: istock, McCormick

McCormick Stock Falls Despite Q3 Earnings Beat, Unveils 2-for-1 Stock Split


Sep. 29 2020, Updated 10:29 a.m. ET

McCormick stock is trending down in the pre-market session on Tuesday, Sept. 29. The company reported its earnings results for the third quarter of fiscal 2020, which ended Aug. 31. The company also provided its 2020 outlook and announced a 2-for-1 stock split.

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McCormick’s Q3 earnings results

In the third quarter, McCormick reported an adjusted EPS of $1.53 compared to $1.46 in the third quarter of fiscal 2019. The adjusted EPS beat analysts’ average estimate of $1.52. McCormick generated sales of $1.43 billion in the third quarter, which was 7.6 percent more than the third quarter of fiscal 2019. The company beat analysts’ average sales estimate of $1.40 billion. The company is benefiting from people eating at home more amid the coronavirus pandemic.

mccormick seasoning
Source: McCormick
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In the third-quarter earnings release, McCormick CEO Lawrence E. Kurzius said, “Our results for the third quarter continued to be significantly impacted by the sustained consumer preference for cooking more at home.”

McCormick expects its fiscal 2020 revenues to grow at the upper end of its 4 percent to 5 percent range. Also, the company expects its fiscal 2020 adjusted EPS to be between $5.64 and $5.72 compared to analysts’ consensus estimate of $5.76.

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What is a stock split?

On Sept. 29, McCormick announced a 2-for-1 stock split. The stock split means that McCormick shareholders of record on Nov. 20 would receive one additional share for each share they currently hold. The stock split would take place after the close of trading on Nov. 30. The split shares would start trading on Dec. 1.

A stock split increases the number of outstanding shares in a company. The company’s market capitalization remains unchanged after a stock split.

mccormick products
Source: McCormick
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What is McCormick's stock price today?

McCormick stock was down about 3.0 percent at $189.50 in pre-market trading on Sept. 29 as of this article's writing. The stock rose 1.9 percent on Sept. 28 and closed at $195.18 with a market capitalization of $26.0 billion. McCormick stock has risen by 1.5 percent in the last five days and 16.9 percent in the last year.

McCormick stock is trading 7.5 percent below its 52-week high of $211.07 and 73.9 percent above its 52-week low of $112.23. Year-to-date, the stock had risen by 15 percent as of Sept. 28.

Should you buy McCormick stock?

Currently, analysts' stock price forecast for McCormick is $169.50, which suggests a 13.2 percent downside. The highest target price of $205 implies a 5 percent upside, while the lowest target price of $121 suggests a 38 percent downside. Among the 13 Wall Street analysts who track McCormick, three recommend a buy, six recommend a hold, and four recommend a sell.


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