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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
MKC — frequently asked questions
Is McCormick & Company Incorporated overvalued?
In our latest published analysis dated 2026-09-20, MKC looks meaningfully undervalued. The price recorded at analysis is 48,7 USD versus our fair value of 57,6 USD; the high endpoint is presented separately as potential value of 102 USD. That implies roughly 18.2% upside to fair value at that date.
Our latest published report, analyzed 2026-09-20, gives MKC a fair value of 57,6 USD and a potential value of 102 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for McCormick & Company Incorporated's archetype; it is a dated research output, not a live price.
Should I buy MKC now?
Our latest published rating for MKC, analyzed 2026-09-20, is Buy. McCormick & Company Incorporated looks meaningfully undervalued at the analysis-date price of 48,7 USD versus fair value of 57,6 USD; potential value is 102 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for MKC?
The dedicated bear-case section in our report analyzed 2026-09-20 documents McCormick & Company Incorporated's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is MKC's rating?
Our latest published rating for MKC, analyzed 2026-09-20, is Buy, with a published moat assessment of 7/10 (Narrow). It reflects our fair value of 57,6 USD, the potential value of 102 USD, and the price recorded at analysis (48,7 USD).
Báo cáo này chưa được dịch. Hãy làm mới sau vài phút khi hàng đợi dịch xử lý xong.
§1 Tóm tắt điều hànhEN
Câu trả lời trong 30 giâyBuy
Giá so với giá trị
Giá
$48.72
Giá trị hợp lý
$57.60
Giá trị tiềm năng
$102.44
Tính đến
2026-09-18
Vì sao luận điểm có thể đúng
Accelerated international expansion across EMEA ($1,268.5M, 18.5% of revenue) and Asia Pacific ($704.0M, 10.3% of revenue), paired with expanding B2B custom flavor formulations, driving top-line growth and expanding valuation toward Potential value of $102.44.
We rate McCormick & Company a Buy. At the report-date price of $48.72 on September 18, 2026, the stock trades at an 18.2% discount to our Fair value of $57.60. Downside risk centers on customer concentration and private-label retail pushback at Walmart. However, proprietary flavor partnerships and category brand loyalty provide resilient cash generation to drive outperformance.3,6
The committee assigns a Buy rating, indicating that McCormick offers an attractive risk-adjusted return profile for long-term compounder and dividend-oriented investors.
On the analysis date of September 18, 2026, McCormick shares traded at $48.72, standing 15.4% below our house Fair value estimate of $57.60 and well below of $102.44.
The principal risk to this investment thesis is customer concentration and pricing pushback at Walmart, which generates 12.0% of consolidated revenue. If Walmart demands aggressive promotional allowances or favors private-label spices, Consumer segment revenue would contract below negative 2% YoY, compressing consolidated operating margins toward 13.5%.5,6
Conversely, the primary driver of upside is McCormick's dual-engine pricing power and proprietary formulation stickiness. The Consumer segment sustains a 37.9% gross margin via dominant shelf placement, while Flavor Solutions embeds co-developed recipes across multinational food makers. This combination generates $740.4M in free cash flow, supporting dividend growth and expanding value toward Potential value of $102.44.4,5,6
Premium Pricing and Shelf Leadership in Consumer Spices
McCormick commands a 37.9% gross margin in retail seasonings, significantly exceeding packaged food peers and reflecting enduring consumer brand equity.5
High Switching Costs in Custom Flavor Solutions
Co-developed seasoning blends and technical integration across multinational food makers generate $2,890.0M in sticky institutional revenue.6
McCormick is rated Buy based on its durable pricing power in consumer spices and high switching costs in custom flavor formulations.
Tổng quan công ty
McCormick is a global leader in flavor. McCORMICK & COMPANY, INCORPORATED manufactures, market, and distribute spices, seasoning mixes, condiments, and other flavorful products to the entire food and beverage industry–retailers, food manufacturers, and foodservice businesses. McCORMICK & COMPANY, INCORPORATED manages its business in two operating segments, Consumer and Flavor Solutions, as described in Item 1 of this report. McCORMICK & COMPANY, INCORPORATED operates in two business segments: Consumer and Flavor Solutions. The Consumer and Flavor Solutions segments manufacture, market and distribute herbs, spices, seasoning mixes, condiments and other flavorful products throughout the world.
McCORMICK & COMPANY, INCORPORATED measures the performance of its business segments based on operating income, excluding special charges. See Note 15 of notes to its consolidated financial statements for additional information on its segment measures as well as for a reconciliation by segment of operating income, excluding special charges.
§2 Kịch bản tiêu cựcEN
Under a simulated stress scenario where retail private-label substitution accelerates and commercial accounts dual-source flavor inputs, consolidated revenue growth slows to 1.75% annually. Operating margins contract from 15.65% toward 10.94% as promotional allowances rise and unabsorbed factory overhead accumulates. In this environment, free cash flow generation declines, reducing balance sheet deleveraging capacity against $4,933.5M of total debt and restraining annual dividend expansion.
Private-label store brand substitution accelerates in retail grocery channels.6
Customer dual-sourcing limits production run volumes in B2B flavor systems.6
The downside path models retail shelf space losses to private-label offerings and contract renegotiations from concentrated commercial customers. Disconfirmation of downside risk would occur if retail grocery scanner data shows branded market share gains across core spices over consecutive quarters.
Các cách luận điểm này có thể đổ vỡ
Private-label share gains and Walmart retail buyer pushback trigger volume contraction and pricing concessions in the Consumer segment
Walmart represents 12.0% of revenue, and gross margins face promotional pressure from packaged food peers. If retail buyer negotiations push consumer growth below negative 2% annually, shelf space compression triggers brand concessions.6
FV impact
-13.5%
Revenue and EPS growth 5 points lower for five years
Trigger
Within 12 months
Tín hiệu cảnh báo sớm cần theo dõi
Năm diễn biến có thể làm suy yếu luận điểm đầu tư của chúng tôi.
01
Consumer Segment Organic Sales Growth
Volume contraction signals private-label shelf encroachment and customer resistance to branded pricing at major retailers, impairing gross margin stability and core cash generation.
Hiện tại:57.8% sales share in FY2025
Cảnh báo nếuSustained decline below negative 2.0% YoY for two consecutive quarters
McCormick holds a narrow economic moat underpinned by brand loyalty in retail spices and customer switching costs in commercial flavor systems. In FY2025, consolidated gross margin reached 37.9%, significantly exceeding the packaged foods industry benchmark of 23.2% and peer levels at Campbell Soup (28.57%), Lamb Weston (20.68%), and Hormel Foods (15.74%). Operating income of $1,070.8M confirms pricing power and cost recovery across primary cooking categories.
Franchise durability is bounded by retail concentration, with Walmart accounting for 12.0% of revenue, and commercial exposure to PepsiCo at 12.0% of sales. Nevertheless, proprietary culinary recipes and category captaincy defend core shelf space, keeping advantages stable.
Lợi nhuận kinh tế
Return on invested capital of 8.86% exceeds the computed weighted average cost of capital of 6.92%, confirming positive economic profit generation across business cycles.1
7/ 10
Narrow
Sources of advantage
01Consumer Brand Equity and Shelf Leadership — Consumer segment generated $3,950.3M representing 57.8% of FY2025 revenue, driving a consolidated 37.9% gross margin.Wide
02Flavor Solutions Technical Switching Costs — Flavor Solutions contributed $2,890.0M in FY2025 revenue through co-developed flavor systems that require costly reformulation to replace.Moderate
Mối đe dọa đã biết với lợi thế cạnh tranh
Mối đe dọa
Mức độ
Mốc thời gian
Giảm thiểu
Retail private-label penetration and grocery buyer pushback
medium
12 to 24 months
Tiered brand architecture and category management optimize retailer margin productivity.
B2B customer reformulation or dual-sourcing initiatives
The highlighted cell is Fair value when every assumption sits at its base level ($57.60). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $899.6M after modeled capex of $175.0M, with terminal value at 65.6% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Steady volume growth across core culinary product lines.6
Preservation of operating margins through supply chain productivity initiatives.5
The base path expects steady compound growth driven by essential consumer seasoning demand and ongoing B2B flavor development partnerships. Disconfirmation would appear by mid-FY2027 if retail promotional pressure erodes shelf leadership or key retail partners demand pricing concessions.6
Faster international culinary penetration across developing markets.6
Expanded technical flavor partnerships with packaged food leaders.6
§7 Cây quyết định lợi nhuậnEN
Vượt
Upgrade to Strong Buy; Consider expanding position sizing as operating margin outperformance confirms structural brand strength across global retail channels.
Accelerating volume growth across retail channels paired with robust pricing power would prove market share gains against store brands and warrant the highest rating band.
Đúng kỳ vọng
Maintain Buy; Maintain planned allocation and reinvest dividends while verifying quarterly cash conversion and shelf productivity.
Consistent financial delivery validates the compounder thesis and supports retaining the house position.
Hụt
Downgrade to Hold; Pause incremental capital commitments, re-evaluate customer concentration risks, and monitor retail order volumes.
Kích hoạt: Volume contraction in Consumer or margin compression from customer pricing pushback.
Significant concessions to major retail partners or volume cancellations in Flavor Solutions would weaken cash generation and require a more defensive stance.
Chất lượng lợi nhuận
Reported earnings reflect high cash generation, with operating cash flow consistently outpacing net income, disciplined working capital management, and steady inventory turns that support long-term dividend distributions.5
Chỉ số cần theo dõi trước khi công bố
01
Chỉ số:
Consumer Segment Organic Volume Growth
Hiện tạiConsumer revenue represents the primary share of total company sales with stable demand.
Vì sao quan trọng
Measures whether brand demand expands independent of pricing actions, showing customer loyalty against store-brand spice alternatives.6
Capital allocation prioritizes continuous dividend growth, supported by thirty-seven consecutive years of increases, alongside disciplined reinvestment in plant automation and selective debt retirement. Share repurchases remain modest at $34.8M in FY2025, preserving cash to manage $4,933.5M in total debt.
Return on invested capital reflects sustained operating profitability across brand seasonings and high customer retention in custom flavor formulations.
Latest ROIC of 8.86% comfortably exceeds the computed WACC of 6.92%, confirming positive economic value addition.
Self-funded cash generation provides ample liquidity to cover annual dividend payments of $483.0M while steadily paying down term obligations.
Doanh thu mới nhất6,8 T US$CAGR doanh thu +5,0%
Biên hoạt động15,7%10 kỳ tài chính
Dòng tiền tự do mới nhất740,4 Tr US$FY2025
Nợ ròng3,5 T US$FY2025
Phân tích báo cáo kết quả kinh doanhQuy mô kinh doanh chuyển thành lợi nhuận báo cáo như thế nào.
StockMarketAgent.AI
Doanh thu6,8 T US$Giá vốn doanh thu−4,2 T US$Lợi nhuận gộp2,6 T US$Chi phí hoạt động−1,5 T US$Lợi nhuận hoạt động1,1 T US$Các khoản ngoài hoạt động và thuế−281,4 Tr US$Lợi nhuận ròng789,4 Tr US$
Dữ liệu lịch sử tài chính
Doanh thu
6.840.300.000 US$
Giá vốn doanh thu
4.248.100.000 US$
Lợi nhuận gộp
2.592.200.000 US$
Chi phí hoạt động
1.521.400.000 US$
Lợi nhuận hoạt động
1.070.800.000 US$
Các khoản ngoài hoạt động và thuế
-281.400.000 US$
Lợi nhuận ròng
789.400.000 US$
Tổng quan bảng cân đối kế toánCách tài sản đã báo cáo được nắm giữ và tài trợ trong kỳ đã chọn.
StockMarketAgent.AI
Cơ cấu tài sảnNguồn tài trợ
Tổng tài sản13,2 T US$Tiền mặt95,9 Tr US$Tài sản ngắn hạn2,1 T US$Tổng nợ phải trả7,4 T US$Nợ ngắn hạn3,1 T US$Vốn chủ sở hữu5,8 T US$
Dữ liệu phân tích bảng cân đối kế toán
Tổng tài sản
13.200.400.000 US$
Tiền mặt
95.900.000 US$
Tài sản ngắn hạn
2.138.100.000 US$
Tổng nợ phải trả
7.432.300.000 US$
Nợ ngắn hạn
3.062.200.000 US$
Vốn chủ sở hữu
5.768.100.000 US$
Cầu nối dòng tiềnDòng tiền từ hoạt động chuyển thành dòng tiền tự do như thế nào trong FY2025.
StockMarketAgent.AI
Đối chiếu dòng tiền hoạt động
Lợi nhuận ròng789,4 Tr US$Khấu hao và phân bổ+231,3 Tr US$Thù lao bằng cổ phiếu+46,2 Tr US$Điều chỉnh hoạt động khác−104,7 Tr US$Dòng tiền hoạt động962,2 Tr US$
Đối chiếu tiền đầu kỳ đến cuối kỳ
Tiền đầu kỳ186,1 Tr US$Dòng tiền hoạt động+962,2 Tr US$Dòng tiền đầu tư−255,2 Tr US$Dòng tiền tài chính−840,9 Tr US$Ảnh hưởng tỷ giá+43,7 Tr US$Tiền cuối kỳ95,9 Tr US$
962,2 Tr US$ − 221,8 Tr US$Dòng tiền tự do 740,4 Tr US$
Dữ liệu cầu nối dòng tiền
Lợi nhuận ròng
789.400.000 US$
Dòng tiền vào từ hoạt động
1.066.900.000 US$
Khấu hao và phân bổ
231.300.000 US$
Thù lao bằng cổ phiếu
46.200.000 US$
Dòng tiền hoạt động
962.200.000 US$
Dòng tiền ra từ hoạt động
104.700.000 US$
Tiền sẵn có
1.192.000.000 US$
Tiền đầu kỳ
186.100.000 US$
Ảnh hưởng tỷ giá
43.700.000 US$
Dòng tiền ra từ đầu tư
255.200.000 US$
Capex
221.800.000 US$
Hoạt động đầu tư khác
33.400.000 US$
Dòng tiền ra từ tài chính
840.900.000 US$
Tiền cuối kỳ
95.900.000 US$
Dòng tiền đầu tư
-255.200.000 US$
Dòng tiền tài chính
-840.900.000 US$
Doanh thu theo phân khúc hoạt độngTỷ trọng trong tổng doanh thu của 2025-11-30.
6,8 T US$Tổng doanh thu
Doanh thu theo phân khúc hoạt độngTỷ trọng
Consumer4 T US$57,8%+2,6% so với cùng kỳ
Flavor Solutions2,9 T US$42,2%+0,5% so với cùng kỳ
Nguồn: SEC EDGAR · Nộp ngày 2026-01-22 · SEC EDGAR
Dữ liệu cơ cấu doanh thu: Doanh thu theo phân khúc hoạt động
Doanh thu theo phân khúc hoạt động
Doanh thu
Tỷ trọng
so với cùng kỳ
Consumer
4 T US$
57,8%
2,6%
Flavor Solutions
2,9 T US$
42,2%
0,5%
Doanh thu theo khu vựcTỷ trọng trong tổng doanh thu của 2025-11-30.
6,8 T US$Tổng doanh thu
Doanh thu theo khu vựcTỷ trọng
Americas4,9 T US$71,2%+1,4% so với cùng kỳ
Europe Middle East And Africa1,3 T US$18,5%+2,4% so với cùng kỳ
Asia Pacific704 Tr US$10,3%+3,2% so với cùng kỳ
Nguồn: SEC EDGAR · Nộp ngày 2026-01-22 · SEC EDGAR
Dữ liệu cơ cấu doanh thu: Doanh thu theo khu vực
Doanh thu theo khu vực
Doanh thu
Tỷ trọng
so với cùng kỳ
Americas
4,9 T US$
71,2%
1,4%
Europe Middle East And Africa
1,3 T US$
18,5%
2,4%
Asia Pacific
704 Tr US$
10,3%
3,2%
Doanh thu và lợi nhuậnQuy mô kinh doanh chuyển thành lợi nhuận báo cáo như thế nào.
Tiền mặt và nợThanh khoản sẵn có so với tổng dư nợ.
Tạo dòng tiềnDòng tiền hoạt động so với dòng tiền tự do.
Khả năng sinh lờiDiễn biến biên gộp, biên hoạt động và biên ròng.
Dữ liệu tài chính tại thời điểm được dùng trong phân tích ngày 2026-09-20.
Dữ liệu lịch sử tài chính
Kỳ
Doanh thu
EBITDA
Lợi nhuận ròng
Dòng tiền hoạt động
Dòng tiền tự do
Capex
Khấu hao và phân bổ
Thù lao bằng cổ phiếu
Mua lại cổ phiếu
Cổ tức đã trả
Phát hành nợ ròng
Dòng tiền đầu tư
Dòng tiền tài chính
Tiền đầu kỳ
Tiền cuối kỳ
Tiền mặt và đầu tư
Tổng nợ
Biên hoạt động
ROIC
WACC
Chênh lệch ROIC−WACC
2016-11-30
4,4 T US$
753,9 Tr US$
472,3 Tr US$
658,1 Tr US$
504,3 Tr US$
153,8 Tr US$
108,7 Tr US$
25,6 Tr US$
242,7 Tr US$
217,8 Tr US$
—
-267,1 Tr US$
-371,5 Tr US$
—
118,4 Tr US$
20,8 Tr US$
1,1 T US$
14,5%
—
4,8%
—
2017-11-30
4,7 T US$
815,7 Tr US$
477,4 Tr US$
815,3 Tr US$
632,9 Tr US$
182,4 Tr US$
125,2 Tr US$
23,9 Tr US$
137,8 Tr US$
237,6 Tr US$
—
-4,5 T US$
3,8 T US$
118,4 Tr US$
186,8 Tr US$
78,9 Tr US$
4,8 T US$
14,8%
—
4,4%
—
2018-11-30
5,3 T US$
1,1 T US$
933,4 Tr US$
821,2 Tr US$
652,1 Tr US$
169,1 Tr US$
150,7 Tr US$
25,6 Tr US$
62,3 Tr US$
273,4 Tr US$
—
-158,5 Tr US$
-751,1 Tr US$
186,8 Tr US$
96,6 Tr US$
96,6 Tr US$
4,1 T US$
16,8%
—
4,9%
—
2019-11-30
5,3 T US$
1,1 T US$
702,7 Tr US$
946,8 Tr US$
773,1 Tr US$
173,7 Tr US$
158,8 Tr US$
37,2 Tr US$
95,1 Tr US$
302,2 Tr US$
—
-171 Tr US$
-725,8 Tr US$
96,6 Tr US$
155,4 Tr US$
155,4 Tr US$
3,7 T US$
17,9%
—
3,2%
—
2020-11-30
5,6 T US$
1,2 T US$
747,4 Tr US$
1 T US$
816 Tr US$
225,3 Tr US$
165 Tr US$
46 Tr US$
47,3 Tr US$
330,1 Tr US$
—
-1 T US$
220,9 Tr US$
155,4 Tr US$
423,6 Tr US$
423,6 Tr US$
4 T US$
17,8%
—
2,4%
—
2021-11-30
6,3 T US$
1,2 T US$
755,3 Tr US$
828,3 Tr US$
550,3 Tr US$
278 Tr US$
186,3 Tr US$
66,6 Tr US$
8,6 Tr US$
363,3 Tr US$
—
-908,6 Tr US$
22 Tr US$
423,6 Tr US$
351,7 Tr US$
351,7 Tr US$
4,7 T US$
16,1%
—
2,8%
—
2022-11-30
6,4 T US$
1,2 T US$
682 Tr US$
651,5 Tr US$
389,5 Tr US$
262 Tr US$
200,6 Tr US$
60,3 Tr US$
38,8 Tr US$
396,7 Tr US$
-73,7 Tr US$
-146,4 Tr US$
-487,2 Tr US$
351,7 Tr US$
334 Tr US$
334 Tr US$
3,9 T US$
13,6%
—
5,4%
—
2023-11-30
6,7 T US$
963 Tr US$
680,6 Tr US$
1,2 T US$
973,4 Tr US$
263,9 Tr US$
199,3 Tr US$
63,4 Tr US$
35,7 Tr US$
418,5 Tr US$
-736,3 Tr US$
-260,5 Tr US$
-1,2 T US$
334 Tr US$
166,6 Tr US$
166,6 Tr US$
4,1 T US$
14,5%
—
6,0%
—
2024-11-30
6,7 T US$
1,3 T US$
788,5 Tr US$
921,9 Tr US$
647 Tr US$
274,9 Tr US$
208,8 Tr US$
47,4 Tr US$
53,1 Tr US$
451 Tr US$
-94,5 Tr US$
-269 Tr US$
-583,1 Tr US$
166,6 Tr US$
186,1 Tr US$
186,1 Tr US$
3,9 T US$
15,8%
—
6,0%
—
2025-11-30
6,8 T US$
1,3 T US$
789,4 Tr US$
962,2 Tr US$
740,4 Tr US$
221,8 Tr US$
231,3 Tr US$
46,2 Tr US$
34,8 Tr US$
483 Tr US$
-366,6 Tr US$
-255,2 Tr US$
-840,9 Tr US$
186,1 Tr US$
95,9 Tr US$
95,9 Tr US$
3,6 T US$
15,7%
—
5,8%
—
§9 So sánh định giá với các doanh nghiệp cùng ngành
Giá trị hợp lýReport-date price
McCormick & Company IncorporatedMKC
Giá / giá trị hợp lý
Giá trị hợp lý57,6 US$Report-date price48,72 US$
Ngày đánh giá
Hào kinh tếNarrow
Bảng điểm đầu tư63 / 100
The J.M. Smucker CompanySJM
Giá / giá trị hợp lý
Giá trị hợp lý81,01 US$Report-date price120,02 US$
McCormick & Company Incorporated (MKC) trades at 14.2x forward earnings against a peer median of 12.4x. Its EV/EBITDA of 12.6x compares with a peer median of 9.1x. The comparison uses 4 peers: The J.M. Smucker Company, Hormel Foods Corporation, Lamb Weston Holdings Inc. and Campbell Soup Company, as of 2026-09-19 to 2026-09-20.
§10 Ngành và chu kỳEN
Pha chu kỳ
Expansion
Packaged food industry capex-to-revenue stands at 2.3% and capex-to-depreciation is 1.34x. McCormick operates with FY2025 capex of $221.8M representing 3.24% of revenue and 0.96x depreciation.5
Chu kỳ tăng giá
Culinary premiumization, rising demand for ethnic seasonings, and restaurant food service recovery expand demand for both packaged spices and custom flavor formulations across international regions.
Chu kỳ giảm giá
Consumer grocery belt-tightening accelerates store-brand private label adoption, while packaged food conglomerates rationalise SKU counts and seek price concessions to defend their own margins.
Xu hướng dài hạn
Xu hướng
Tác động
Ghi chú
Global Culinary Flavor Exploration and Home Cooking
positive
Younger demographics demand diverse spices and hot sauces, expanding center-store spice category sales faster than standard center-store packaged groceries.
Private-Label Grocery Penetration
negative
Retail grocers expand store-brand spice offerings at discount price points, forcing branded manufacturers to invest continuously in marketing and packaging innovation.
McCormick occupies category leadership in consumer seasonings and essential co-development status in B2B flavor systems, positioning it well above commoditized food processing peers.
§11 Quản lý vị thếEN
Quy mô vị thế
3-5%
A 3-5% target weighting is appropriate for a mature dividend compounder, balancing high cash flow visibility and dividend yield against customer concentration risks at Walmart and PepsiCo.6
Rủi ro
Limit total portfolio allocation to 5% to constrain exposure to packaged food channel concentration and private-label grocery promotional cycles.
Đợt vào lệnh
Mức
Hành động
Lý do
Below $49.00
Initiate first tranche up to 2% portfolio weight
Offers an attractive discount to Fair value of $57.60 with favorable risk-reward asymmetry.
Below $46.00
Add second tranche to reach full 3-5% recommended position size
Provides enhanced margin of safety against retail promotional headwinds and debt refinancing costs.
Đợt thoát lệnh
Mức
Hành động
$57.60
Trim one-third of position at Fair value to rebalance gains
$70.00
Trim additional one-third as valuation approaches Potential value range
Thirty-seven consecutive years of dividend increases backed by $740.4M in free cash flow and a 1.22x operating cash conversion ratio provide highly dependable capital return.4,5
Long-Term Quality Compounders
Buy
An 8.86% ROIC exceeding the 6.92% cost of capital confirms durable economic value creation, with shares trading at a wide margin of safety to Potential value of $102.44.1
Defensive Core Allocators
Buy
Essential recipe positioning and custom commercial flavor partnerships protect baseline cash flows against cyclical macro downturns.6
§14 Khuyến nghị cuối cùngEN
Hành động
Mua
McCormick represents a high-quality consumer compounder trading at an 18.2% discount to our Fair value of $57.60 on the analysis date of September 18, 2026.3
Strong free cash flow of $740.4M supports a durable dividend payout and steady balance sheet deleveraging, while proprietary flavor formulations protect economic margins.
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Sources
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Refinancing of maturing debt at higher borrowing rates combined with elevated equity risk premium increases corporate cost of capital by 200 bps
McCormick carries $4,933.5M of total debt against $95.9M in cash and current liabilities of $3,062.2M. With pre-tax debt cost at 5.76% relative to baseline WACC of 6.92%, refinancing above 8.92% would severely erode equity value.1,3,5
FV impact
-20.7%
Cost of capital 2 points higher
Trigger
Within 24 months
Dual-sourcing and reformulation at PepsiCo combined with retail grocery shelf slot compression drives bear case execution
PepsiCo accounts for 12.0% of revenue and Walmart accounts for 12.0%. Loss of custom formulation volume creates unabsorbed plant overhead, degrading consolidated operating margin toward historical levels of 13.60%.5,6
FV impact
-6.2%
The analyst's bear scenario path and multiple as the base case
Trigger
Within 18 months
Margin erosion would indicate inability to pass through ingredient packaging inflation or severe price concessions demanded by retail channel partners, permanently lowering operating cash conversion.
Hiện tại:37.9% in FY2025
Cảnh báo nếuContraction below 36.5% over any rolling twelve-month period
Stagnation across international culinary markets removes key geographic volume diversification, leaving consolidated revenue tethered to mature, low-growth North American retail grocery channels.
Hiện tại:$1,268.5M EMEA and $704.0M APAC in FY2025
Cảnh báo nếuAnnual constant-currency growth dropping below 0.0% in any fiscal year
Higher refinancing expense on $4,933.5M of total debt increases interest burden and drains free cash flow, constraining dividend growth and balance sheet flexibility.
Hiện tại:5.76% as of 2026-09-20
Cảnh báo nếuEffective borrowing cost exceeding 7.50% on debt refinancings
Co-located technical development teams and proprietary recipe integration protect retention.
Limitation: Terminal value is 65.6% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Limitation: Terminal value is 78.4% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
The bull path reflects accelerated geographic expansion across EMEA and Asia Pacific, accompanied by premium brand mix shift and faster food service volume recovery. Disconfirmation would emerge if international sales decelerate or custom flavor contracts fail to expand product lines by late FY2027.6
Hiện tạiGross margin remains substantially higher than packaged food peer averages.
Vì sao quan trọng
Reveals whether cost increases in raw spices and packaging can be passed to retail and commercial partners without sacrificing gross profit.5
03
Chỉ số:
B2B Custom Flavor Formulation Retention
Hiện tạiFlavor Solutions delivers steady institutional volume across multinational food partners.
Vì sao quan trọng
Indicates customer switching costs and ongoing product co-development with global food manufacturers like PepsiCo.6
04
Chỉ số:
International Geographic Volume Expansion
Hiện tạiEurope and Asia Pacific provide meaningful regional diversification outside the domestic core.
Vì sao quan trọng
Diversifies top-line performance beyond the Americas and taps faster-growing culinary markets across Europe and Asia.6
