Shares of food flavoring products provider McCormick & Company (NYSE:MKC) are trending lower in the pre-market session today as weak preliminary numbers for the third quarter and a full year 2022 guidance cut are weighing on the stock.
For Q3, sales are seen increasing by ~3% year-over-year and adjusted EPS is expected at $0.65 versus $0.80 in the year-ago period. The divestiture of the Kitchen Basics unit in Q3 impacted MKC’s Consumer segment growth. Further, supply chain constraints, changing buying patterns, and rising costs remain a challenge.
Owing to these factors, and unfavorable forex movements, McCormick now expects 2022 sales to register 3% to 5% growth over 2021 in constant currency terms (previous guidance of 5% to 7% growth).
Adjusted EPS for 2022 is seen landing between $2.63 and $2.68 (Previous guidance of $3.03 to $3.08).
The company’s Q3 results are expected on October 6 before the market opens. The Street expects the company to post an EPS of $0.83 for Q3.
Is MKC a Good Stock to Buy?
Today, following the results, Deutsche Bank’s Stephen Powers reiterated a Hold rating on the stock while decreasing the price target to $79 from $85.
Overall, the Street has a Hold consensus rating on McCormick alongside an average price target of $87.83. This indicates an 11.26% potential upside in the stock.
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