Wall Street assigns moderate buy to McCormick ahead of Unilever merger
Despite significant underperformance against the S&P 500 and its sector over the past year, consensus ratings point to upside driven by pending merger activity and strong first-quarter fiscal 2026 sales growth.
Wall Street analysts covering McCormick & Company have issued a consensus "Moderate Buy" rating, assigning a mean price target of $63.82. This valuation implies a 36.7 per cent upside from current market levels, with the highest target on the Street reaching $77, representing a 64.9 per cent potential gain. The rating reflects investor sentiment surrounding the company’s pending $15.7 billion merger with Unilever’s food business, excluding India, which is expected to close in mid-2027 subject to shareholder approval.
The consensus comprises seven "Strong Buy" ratings and six "Hold" ratings among the 13 analysts covering the stock. This configuration has remained stable over the past month. However, sentiment is not uniformly bullish; BTIG recently initiated coverage with a "Neutral" rating. The firm cited a fair valuation for McCormick’s base business but expressed skepticism regarding the merged entity's ability to capture anticipated revenue synergies.
McCormick’s stock has significantly underperformed both the broader market and its sector over the past 52 weeks. The shares have dropped 38.1 per cent, compared to a 24.3 per cent gain for the S&P 500 Index. Against its sector, represented by the State Street Consumer Staples Select Sector SPDR ETF, McCormick has also lagged, with the ETF gaining 4.7 per cent over the same period. The stock reached a 52-week low of $44.82 on May 13 before recovering 4.2 per cent from that level.
Despite the poor stock performance, the company reported better-than-expected results for the first quarter of fiscal 2026. Total net sales grew 16.7 per cent year-on-year, while organic sales increased by 1.2 per cent. The company has a history of beating expectations, having topped consensus estimates in three of the four trailing quarters. Management is forecasting 13 per cent to 17 per cent net sales growth and 1 per cent to 3 per cent organic sales growth for the current fiscal year.
Looking ahead, Wall Street expects earnings per share to grow 2.9 per cent year-on-year to $0.71 for the current quarter. Annual EPS is projected to increase 3 per cent to $3.09 in fiscal 2026, followed by a 9.7 per cent improvement to $3.39 in fiscal 2027. The merger with Unilever, which includes brands such as Hellmann’s Mayo and Marmite, is designed to leverage McCormick’s global flavor-creation platform with Unilever’s food offerings to create further revenue synergies.
