US Equities Analysis

MKC — McCormick & Company

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 14.34%
Profit Margins 23.12%
Return on Equity 25.35%
Return on Assets 4.88%
Free Float 0.27B
Dividend Yield 3.76%

2.2 Growth

Metric Value
Revenue Growth 16.7%
Free Cash Flow 0.37B
EBITDA 13.76 (Ratio)
Enterprise Value 18.67B
EV/Revenue 2.63
EV/EBITDA 13.76

Revenue growth of 16.7% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -15.44%
Risk / Std Dev (Ann.)* 29.99%
1-Year Price Return* -19.03%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $54.67
52-Week Range $44.82 – $72.58
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $6.84B
Prior annual revenue $6.72B
EBIT $1.11B
Tax rate 21.40%
NOPAT = EBIT × (1 − tax rate) $871.83M
Forecast start-growth basis 1.73%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $871.83M
Add: depreciation & amortisation $231.30M
Less: capital expenditure -$221.80M
Less/(add): working-capital cash-flow movement -$83.80M
Current unlevered FCFF $797.53M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 1.73% $886.95M $235.31M -$225.65M -$85.25M $811.36M $783.78M
2 1.93% $904.03M $239.84M -$232.45M -$86.89M $824.52M $743.26M
3 2.12% $923.17M $244.92M -$239.89M -$88.73M $839.46M $706.16M
4 2.31% $944.48M $250.57M -$248.00M -$90.78M $856.27M $672.16M
5 2.50% $968.09M $256.84M -$256.84M -$93.05M $875.04M $640.99M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.63
Cost of equity 8.16%
Pre-tax cost of debt 4.52%
WACC 7.16%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $19.24B
Implied terminal EV / EBITDA 12.93x
Terminal value as % of enterprise value 79.33%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $3.55B
Present value of terminal value $13.61B
Indicated enterprise value $17.16B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $17.16B
Less: gross interest-bearing debt $4.16B
Add: cash and equivalents $95.90M
Add: affiliate investments $0.00
Less: minority interests $31.60M
Indicated common equity value $13.06B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 269,400,000.00
Share-count basis reported diluted weighted-average shares
Current market price $55.91
DCF indicative value per share $48.48
Indicative value vs. market price -13.28%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 3/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:41:53.876962 UTC; latest reported fiscal period: 2025-11-30 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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