With a market cap of $22.3 billion, Hunt Valley, Maryland-based McCormick & Company, Incorporated (MKC) is a global leader in the manufacturing and distributing of spices, seasonings, and flavor products. The company serves both retail and foodservice industries with a wide range of branded and private-label offerings.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and McCormick & Company fits this criterion perfectly. McCormick & Company is renowned for its innovation in flavor development, leveraging cutting-edge AI technology to create unique seasoning blends while maintaining its position as the world's largest spice producer.
Despite the flavorings and spices leader’s 2.9% decline from its 52-week high of $85.49, achieved on Sep. 16, its shares are up 21.1% over the past three months, outperforming the broader First Trust Nasdaq Food & Beverage ETF's (FTXG) 9.2% gains over the same time frame.
Longer term, MKC is up 21.3% on a YTD basis, outpacing FTXG's 6.1% gains. Shares of McCormick & Company have gained 5.6% over the past 52 weeks, compared to FTXG's 2.1% gains over the same time frame.
To validate its bullish trend, MKC has been trading above its 50-day and 200-day moving averages since July.
McCormick's stock surged 4.3% on Jun. 27 after it reported Q2 earnings of $0.69 per share, beating analysts' expectations. Despite a 1% sales decline, the company impressed with stronger-than-anticipated revenue of $1.6 billion, particularly in its flavor solutions segment. Additionally, its gross profit margin improved for the fourth consecutive quarter, signaling successful efforts to offset rising input costs from inflation.
To emphasize the stock’s outperformance, McCormick’s rival, Hormel Foods Corporation (HRL), which declined 1.1% on a YTD basis and an 18.1% dip over the past 52 weeks, underperformed MKC’s gains over the same period.
Despite MKC's strong performance, analysts are cautious about the stock's prospects. The stock has a consensus rating of “Hold” from the 12 analysts covering in coverage, and as of writing, it is trading above the mean price target of $78.31.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
