McCormick & Company (MKC) AI Stock Analysis

• Market Cap: $17.62B
• Dividend Yield: 2.68%
• Average Volume (3M): 2.91M
• Price to Earnings (P/E): 22.7
• Beta (1Y): 0.20
• Revenue Growth: 1.64%
• EPS Growth: -1.83%
• Country: US
• Employees: 14,100
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.85
• Shares Outstanding: 253,239,900
• 10 Day Avg. Volume: 3,817,011
• 30 Day Avg. Volume: 2,905,040
• PEG Ratio: 1.70
• Price to Book (P/B): 3.98
• Price to Sales (P/S): 3.13
• P/FCF Ratio: 32.54
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 3.42
• Enterprise Value/Gross Profit: 8.96
• Enterprise Value/Ebitda: 18.47
• 1Y Price Target: $77.00
• Price Target Upside: 16.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 70 Outperform
• Price Target: $72.00 ▲(8.91% Upside)

McCormick & Company scores a 70, driven by strong financial performance and strategic initiatives to counter cost pressures. While the technical analysis indicates a bearish trend, the company's moderate valuation and mixed earnings call sentiment suggest a cautious but stable outlook. The focus on innovation and productivity savings is expected to support future growth despite current challenges.

Positive Factors

Revenue Growth

Consistent volume-led growth in the consumer segment indicates strong demand and effective market penetration, supporting long-term revenue expansion.

Innovation and Product Launches

Continued innovation and successful product launches enhance brand strength and market competitiveness, driving future growth and consumer engagement.

Cash Flow Improvement

Significant improvement in free cash flow provides McCormick with greater financial flexibility for strategic investments and debt management.

Negative Factors

Rising Costs

Increased commodity costs reduce profitability, posing a challenge to maintaining margins and requiring strategic cost management to mitigate impacts.

Impact of Tariffs

Tariff-related cost increases strain profitability, necessitating strategic adjustments to pricing and sourcing to sustain financial performance.

Softness in China Food Service

Weak demand in China's food service sector impacts revenue growth, highlighting regional market challenges that may affect overall performance.

McCormick & Company Business Overview & Revenue Model

Company Description

McCormick & Company, Incorporated (MKC) is a global leader in flavor, providing a diverse range of spices, seasonings, and flavoring products for both retail and food service customers. Founded in 1889 and headquartered in Hunt Valley, Maryland, McCormick operates in two primary segments: Consumer and Flavor Solutions. The Consumer segment offers a wide variety of spices, herbs, and seasonings under well-known brands such as McCormick, Lawry's, and Old Bay. The Flavor Solutions segment serves food manufacturers and food service operators with custom flavor solutions and culinary expertise, enhancing the flavors of a wide range of products, from packaged foods to restaurants.

How the Company Makes Money

McCormick generates revenue primarily through the sale of its spices, seasonings, and flavor products across its Consumer and Flavor Solutions segments. The Consumer segment earns revenue from retail sales of branded products to grocery chains and supermarkets, while the Flavor Solutions segment derives income from supplying custom flavors and seasonings to food manufacturers and food service industries. Key revenue streams include product sales, particularly in high-demand categories such as organic and gourmet spices, as well as strategic partnerships with major food companies that enhance distribution and market penetration. Additionally, McCormick benefits from ongoing trends toward home cooking and increased interest in diverse flavors, which drive consumer demand for its extensive product lines.

McCormick & Company Financial Statement Overview

Summary

McCormick & Company demonstrates strong financial health with consistent revenue growth, solid profitability, and improving cash flow metrics. The company has effectively managed its debt levels, enhancing its financial stability. While there are minor concerns regarding operational margins, the overall trajectory remains positive, positioning the company well within the packaged foods industry.

Income Statement

McCormick & Company shows strong financial performance with a consistent revenue growth rate, particularly a 6.69% increase in the TTM period. The company maintains healthy gross and net profit margins, indicating efficient cost management and profitability. However, there is a slight decline in EBIT and EBITDA margins compared to previous years, which could suggest rising operational costs or competitive pressures.

Balance Sheet

The balance sheet reflects a solid financial position with a manageable debt-to-equity ratio of 0.63 in the TTM period, showing improvement from previous years. The return on equity remains robust at 14.10%, indicating effective use of shareholders' equity. However, the equity ratio is not explicitly calculated, and the company should continue to monitor its leverage to maintain financial stability.

Cash Flow

The cash flow statement reveals a significant improvement in free cash flow growth, up by 43.77% in the TTM period, which enhances financial flexibility. The operating cash flow to net income ratio is relatively stable, supporting the company's ability to generate cash from operations. However, the free cash flow to net income ratio, while strong, indicates a slight dependency on net income for cash flow generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.79B	6.72B	6.66B	6.35B	6.32B	5.60B
Gross Profit	2.59B	2.59B	2.50B	2.27B	2.49B	2.30B
EBITDA	1.26B	1.32B	1.21B	1.16B	1.22B	1.18B
Net Income	778.00M	788.50M	680.60M	682.00M	755.30M	747.40M
Balance Sheet
Total Assets	13.25B	13.07B	12.86B	13.12B	12.91B	12.09B
Cash, Cash Equivalents and Short-Term Investments	94.90M	186.10M	166.60M	334.00M	351.70M	423.60M
Total Debt	3.60B	4.51B	4.59B	5.33B	5.39B	5.01B
Total Liabilities	7.46B	7.75B	7.78B	8.43B	8.48B	8.15B
Stockholders Equity	5.75B	5.29B	5.06B	4.68B	4.41B	3.93B
Cash Flow
Free Cash Flow	793.30M	647.00M	973.40M	389.50M	550.30M	816.00M
Operating Cash Flow	878.90M	921.90M	1.24B	651.50M	828.30M	1.04B
Investing Cash Flow	-252.10M	-269.00M	-260.50M	-146.40M	-908.60M	-1.03B
Financing Cash Flow	-755.50M	-583.10M	-1.18B	-487.20M	22.00M	220.90M

McCormick & Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 66.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKC, the sentiment is Negative. The current price of 66.11 is below the 20-day moving average (MA) of 66.47, below the 50-day MA of 68.59, and below the 200-day MA of 73.73, indicating a bearish trend. The MACD of -0.59 indicates Negative momentum. The RSI at 44.02 is Neutral, neither overbought nor oversold. The STOCH value of 27.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MKC.

McCormick & Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MKC	70 Outperform	$17.62B	22.71	13.92%	2.68%	1.64%	-1.83%
GIS	68 Neutral	$27.17B	9.64	30.98%	4.89%	-3.26%	25.58%
CPB	67 Neutral	$9.27B	15.50	15.64%	5.12%	6.40%	6.17%
CAG	64 Neutral	$9.05B	10.66	9.65%	7.57%	-4.11%	72.17%
HRL	63 Neutral	$13.20B	17.50	9.46%	4.85%	0.65%	-3.76%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
SJM	49 Neutral	$11.54B	22.22	-21.32%	4.13%	2.54%	-293.39%

McCormick & Company Corporate Events

McCormick Expands Stake in Mexican Subsidiary

On August 21, 2025, McCormick & Company announced a definitive agreement to acquire an additional 25% ownership in McCormick de Mexico for $750 million, increasing its stake to 75%. This acquisition aims to enhance McCormick’s market leadership in Mexico’s condiment and sauce sector and provides a strategic platform for expansion across Latin America. The transaction is expected to be accretive to McCormick’s net sales, operating margin, and earnings per share in the first year, while leveraging the strong brand loyalty and market presence of McCormick de Mexico.