BofA Stays Positive on McCormick (MKC) Despite Weaker Q4 Results

McCormick & Company, Incorporated (NYSE:MKC) is included among the Best Low Risk Stocks for a Retirement Stock Portfolio.

BofA lowered its price target on McCormick & Company, Incorporated (NYSE:MKC) to $80 from $89 on January 23. However, the firm kept a Buy rating in place. The analyst said the market reacted negatively to the earnings report after several misses in the quarter. Organic sales in Q4 fell short of expectations, mainly due to weaker performance in Americas Flavor Solutions. Gross margin also missed consensus by roughly 150 basis points, and the company’s outlook pointed to slower EPS growth in fiscal 2026 than investors had been expecting. In response, BofA cut its FY26 EPS estimate to $3.09 from $3.21, reflecting the margin pressure seen in the fourth quarter.

The day before, McCormick warned that profits are likely to be under pressure in fiscal 2026 as higher costs from tariffs and commodities weigh on margins. The company said trade uncertainty has pushed commodity prices higher, while ongoing investments in production facilities and brand marketing have added to cost pressures.

Speaking on the post-earnings call, CEO Brendan Foley said inflation, volatile commodity costs, and broader macro conditions drove incremental costs that hurt margins. He added that about 50% of the incremental tariffs on McCormick products remain in place, and related inflationary pressures continue.

McCormick expects tariffs to add about $50 million in incremental costs in fiscal 2026. The company imports several spices, including pepper and herbs, leaving it exposed to higher input costs. Deutsche Bank analyst Steve Powers said the stock may face near-term pressure after the weak quarter and cautious outlook, but noted that McCormick could still benefit longer term from steady demand and its acquisition of McCormick de Mexico.

McCormick & Company, Incorporated (NYSE:MKC) makes and sells spices, seasoning mixes, condiments, and other flavor products worldwide.

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