It's been a long, long time since the packaged foods category, was really thought of as a growth opportunity, but with COVID-19 leading to major changes in consumer behavior, that's what we have ... at least for the moment. Therein lies one of the key issues for McCormick & Company (MKC) ("McCormick") as an investment idea - how much of the shift from paying others to make food for you to doing it yourself will persist once COVID-19 has faded from view?
It always fascinates me when analysts more or less agree on the financial outlook for a company but come up with significantly different fair values, and that's the case here. The spreads between expectations for revenue, EBITDA, and free cash flow aren't all that wide over the next three years, but the spread between the Street-low price target ($134) and Street-high price target ($205) is wide indeed, with most of the analysts on the higher end basing their price targets on what the market is already paying for other packaged food companies.
Follow this link to the full article:
McCormick Riding The Home Cooking Wave, But Valuation Looks Unsustainable
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