Bank of America Securities took a cautious stance on McCormick & Company (NYSE:MKC) by lowering the stock's price target to $80 from $89, although maintaining a Buy rating on the specialty spice and flavor producer. This reassessment follows McCormick’s fiscal fourth-quarter announcement, which revealed an organic sales shortfall driven principally by the Americas Flavor Solutions segment.
The organic growth miss can be attributed to inventory drawdowns by a significant Mexican consumer packaged goods client, which weighed on segment performance. Additionally, McCormick’s gross margin underperformed consensus estimates by approximately 150 basis points, highlighting margin pressure within the company’s operations.
Looking ahead, Bank of America highlighted a downward revision in fiscal year 2026 earnings per share growth projections, which came in below market expectations. The revised outlook incorporates several contributing factors: increased expenditures on enterprise resource planning (ERP) systems, elevated tax rates related to Mexico consolidation efforts, rising interest expenses, and the absence of anticipated tariff relief.
Despite these setbacks, Bank of America pointed to the Americas Consumer business as a strong growth area. The firm emphasized the scarcity of organic growth opportunities within the broader food sector, suggesting that McCormick’s consumer-facing segment could appeal to investors once current uncertainties subside.
In parallel, recent results from McKesson Corporation painted a different financial picture. The healthcare services company surpassed earnings per share expectations for fiscal second quarter 2026, reporting $9.86 versus an anticipated $9.04. However, revenues slightly lagged forecasts, reaching $103 billion against an expected $104.15 billion.
These earnings figures have sparked varied analyst reactions. Leerink Partners responded positively, raising McKesson's price target to $965 from $850 while maintaining an Outperform rating. Similarly, Evercore ISI lifted its price target to $1,000 from $825, citing growth prospects within the North American Pharmaceutical segment’s adjusted operating income. TD Cowen also reaffirmed its Buy rating with a $1,000 price target, attributing confidence to demographic trends and pharmaceutical innovation.
Conversely, Jefferies adopted a more cautious tone, lowering its price target on McKesson to $74 from $79 after the company missed fourth-quarter earnings estimates and issued a conservative guidance for 2026, influenced by inflationary pressures on costs.
These divergent analyses underscore the complexities and varying outlooks within the healthcare and consumer sectors, reflecting shifts in operational performance, fiscal planning, and macroeconomic influences.