Story updated at 10 a.m. to reflect market activity.
Shares of McCormick fell 1.2% to $70.35 in morning trading.
Credit Suisse raised its price target for the company to $72 a share, with a "neutral" rating. The firm also raised its estimates for McCormick due to higher international growth.
Jefferies also raised its price target for the company to $72 a share with a "hold" rating. The firm cites a strong organic growth rate as Industrial benefited from easy revenue and margin comps.
Separately, TheStreet Ratings team rates MCCORMICK & CO INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MCCORMICK & CO INC (MKC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 45.41% is the gross profit margin for MCCORMICK & CO INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.11% is above that of the industry average.
- Net operating cash flow has increased to $237.80 million or 19.67% when compared to the same quarter last year. Despite an increase in cash flow, MCCORMICK & CO INC's cash flow growth rate is still lower than the industry average growth rate of 51.00%.
- MCCORMICK & CO INC's earnings per share declined by 11.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, MCCORMICK & CO INC reported lower earnings of $2.92 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $2.92).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food Products industry and the overall market, MCCORMICK & CO INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: MKC Ratings Report